What Annual payment will discharge a debt of 848 due in 4 years at 4% P.A at simple interest .

Question

This is a template question. As i know the forumla and can get the answer through it but i simply cannot understand the concept.

Please see the image for my solution Simple Interest https://i.stack.imgur.com/L8efC.jpg

I have checked all the books and this is the right formula.

Now the answer is 200 but. 200*4 = 800. How come we are only repaying 800 for a debt of Rs 848

Answer 1

Note that the $848$ is payable after four years i.e. includes interest. But you are paying part of the capital off early, so there will be less interest altogether.

Answer 2

Credits to /u/wijwijwij

He posted a detailed answer on /r/cheatatmathhomework on reddit.

https://www.reddit.com/r/cheatatmathhomework/comments/78u8b5/simple_interest/