Question

A man purchase a house valued 300000.he paid 200000at the time of purchase and agreed to pay the balance with interest 12%compounded half yearly in 20equal half yearly installments. If installment is paid after six months from date of purchase then amount of each installment

Answer 1

Answer:

Here is the solution:

As we know that

P.V = 300000-200000

P.V = 100000

So,

I = 12 percent/ 2

I= 6 perecnt

and  

N = 20

A = ?

Now applying

P.V = A[(1+i)^n-1]/i(1+i)^n

putting values

100000 = A[(1.06)^20-1]/0.06(1.06)^20

A= 8719.66

Hence 8719.66 is the amount of each installation