A person buys a machine at a rate of Rs.50,400 per annum at an interest rate of 10%.He relays the loan in two equal annual instalment. What is the amount of each instalment ?
Answers
Amount of each Installment = Rs 29040 if Rs 50400 at rate of 10% per annum paid in two Annual installemnets
Step-by-step explanation:
Machine Price = 50400
rate of interest = 10 % Per annum
Pay amount in two Equal annual installments
Let say Installment = E Rs
Interest for 1 st Yest = 50400 * 10 * 1 /100 = Rs 5040
Amount paid after 1 year = E Rs
Amount remained to be paid after 1 Year = 50400 + 5040 - E
= 55440 - E Rs
Interest for next year = (55440 - E) * 10 * 1/100 = 0.1(55440 - E)
Amount to be paid = (55440 - E) + 0.1(55440 - E) = 1.1(55440 - E)
1.1(55440 - E) = E
=> 2.1E = 1.1 * 55440
=> E = 29040
amount of each Installment = Rs 29040
or using EMI formula
E = P * (r/100) * ( 1 + r/100)ⁿ/( ( 1 + r/100)ⁿ - 1))
E = 50400 * (10/100) (1 + 10/100)² /((1 + 10/100)² - 1)
E = 5040 * 1.1²/(1.1² - 1)
E = 29040
installment Amount = Rs 29040
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