Mr. Usama borrow a student loan from Arid University of Rs.20,000 at 14 percent compound annual interest for four years. The loan is repayable in four equal annual installments payable at the end of each year.

Requirements:

a. What is the annual payment that will completely amortize the loan over four years?

(You may wish to round to the nearest Rupees.)

b. Of each equal payment, what is the amount of interest? What is amount of loan principal? (Draw amortization table to show the interest and principal amount included in each installment).