a sum of rsp was borrowed from a bank by suraj and paid back into equal early installments each of rs 14120 if the rate of interest is 5% compounded annually

Let's assume that Suraj borrowed an amount of ₹\( P \) from the bank and he paid back this amount through equal annual installments of ₹14,120 each. The interest rate is 5% compounded annually. 

We need to calculate the principal amount (₹\( P \)) Suraj borrowed. To do this, we'll use the formula for the present value of an annuity, since he is repaying the loan in equal annual installments. The formula for the present value of an annuity compounded annually is:

\[
P = R \times \frac{1 - (1 + r)^{-n}}{r}
\]

Where:
- \( P \) is the principal amount borrowed,
- \( R \) is the installment amount (₹14,120),
- \( r \) is the rate of interest per period (5% = 0.05),
- \( n \) is the number of installments (unknown).

We would need to know the total number of installments (\( n \)) to proceed with the calculation. Could you confirm how many years Suraj will be repaying the loan in installments? Alternatively, if you have more details on the total repayment time, we can proceed. 

Would you like more details, or do you have any other questions?

Here are 5 relative questions:
1. How many installments did Suraj pay?
2. What would the borrowed amount be if the rate of interest were different?
3. How would the installment change with a different interest rate?
4. Could the repayment amount be reduced by paying extra in earlier installments?
5. How does compounded interest differ from simple interest?

**Tip:** When dealing with installment payments, understanding how interest is compounded is crucial for accurate calculations.

A sum of money was borrowed from a bank by Suraj and paid back in equal yearly installments of ₹14,120. If the rate of interest is 5% compounded annually, what was the principal amount borrowed?

Find out how to calculate the principal amount borrowed when repaying a loan through equal yearly installments with compound interest at 5%. This example walks through the annuity formula and how to apply it for loan calculations. Ideal for high school students studying finance and algebra concepts.

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