A flat can be purchased on down payment for Rs 100000 plus Rs 200000 at the end of 4 years. If the money is worth 12% compunded annually, what should be the cost price of the flat?
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A flat can be purchased on down payment for Rs 100000 plus Rs 200000 at the end of 4 years. If the money is worth 12% compounded annually, the cost price of the flat Rs 227103.6157
Step-by-step explanation:
The compound interest accumulation formula is given by:
A = P(1 + i)ⁿ
Where,
A = accumulated amount
P = Principal
i = Interest rate
n = the period of accumulation
In this case, we need to get the principal accumulated to Rs 200000 for 4 years at 12% interest.
Substituting this we have:
200000 = P(1.12)⁴
P = 127103.6157
The price of the flat is:
100000 + 127103.6157 = Rs 227103.6157
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