Question

A man borrowed RM 5000 from a bank on 1st January, 2006. On the last day of each month, compound interest at the rate of 1.2% per month on the amount he owed is added. The man repays the debt in 24 equal installments made on the first day of each month, the first installment being paid on 1st February, 2006. Find the amount of each installment.

Answer 1

Answer:

the amount of each installment. = RM 241

Step-by-step explanation:

A man borrowed RM 5000 from a bank

P = 5000

R = 1.2% per month = 0.012

Time = n = 24 Months

Using the Formula for EMI , (EMI = Equated Monthly Installments)

EMI = [P x R x (1+R)ⁿ]/[(1+R)ⁿ-1]

EMI  = (5000 * 0.012  * (1 + 0.012)²⁴)/( (1 + 0.012)²⁴- 1)

= 241

the amount of each installment. = RM 241