Installment - A man borrows money from a finance company and has to pay it back in 2 equal Half Yearly installments of Rs 4945 each. If the ... calculator

We use cookies to improve your experience on our site and to show you relevant advertising.
By browsing this website, you agree to our use of cookies. Learn
more

This is demo example. Please click on Find button and solution will be displayed in Solution tab (step by step)

Installment

7. A man borrows money from a finance company and has to pay it back in 2 equal Half Yearly installments of Rs 4945 each. If the interest is charged by the finance company at the rate of 15 % per annum compounded as installment plan, find the principal and the total interest paid.

InstallAmt = `4945`

Number of Installment = `2`

Rate = `7.5`

The amount of `4945` Rs paid at the end of 1st Year

has its principal equal to ` = 4945 / ( 1 + 7.5 / 100 )`

` = 4945 / ( 107.5 / 100 )`

` = 4945 × 0.9302`

Similarly, for `2^(nd)` Year = `4945 × (0.9302)^2`

`:.` The total of the present values of the `2` Installment is Rs `( 4945 × 0.9302 + 4945 × (0.9302)^2 )`