Question

A building society offers a low start mortgage of Rs. 40,000with 10 annual repayments starting one year from the loan being taken out. The interest rate applying throughout will be 11 % per annum, but the repayments will only be Rs. 5000 per annum for the first five years. What equal annual payments will be required in each of the last 5 years of mortgage​

Answer 1

Answer:

Step-by-step explanation

A= 40000

R of int= 11 %

1st 5 years, inst will be 5000 each

A = p (1 +r/100 ) ⁿ

25000 = P (1 + 11/100)⁵

25000 = P (111 /100)⁵

25000 =P (1.11)⁵

P = 14836

The A= . 40000 - 14836

= 25164

Int = P ₓ R ₓ T

= 25164 ₓ 11 ₓ 5/100

= 13840

A= 25164 + 13840

= 39000.4

5equal inst = 18873