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    A person wants to borrow £100000, intending to pay back a fixed sum £C at the end of each year, so that after 25 years he has completely payed off the debt. Assuming a steady interest rate of 4% per year, explain why

    100000=c(\frac{1}{1.04} + \frac{1}{1.04^2} .........+  \frac{1}{1.04^{25}})

    Calculate C

    I really shouldnt be working this late, I can't even get started.

    Any help guys?

    a= 1/1.04

    r= 1/1.04


    s= (a(r^n - 1))/r-1

    100000/ans = c

    at least that should be the second part.
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Updated: November 13, 2008
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