Question

an overdraft of rupees 50,000 has to be paid back in annual equal installments find the value of installment if the interest is 14% compounded annually​

Answer 1

Answer:

7549.3

Step-by-step explanation:

Using EMI formula

Equated Annual Installemnets = [P x (R/100) x (1+(R/100)ⁿ]/[(1+(R/100)ⁿ-1]

P = 50000

R = Rate of Interest Annually= 14 %

n = Number of Years = 20

Equated Annual Installments = 50000 * (0.14)  * (1.14)²⁰ /( (1.14)²⁰ - 1)

= 7000 * 13.74349 /(13.74349  - 1)

= 7000 * 13.74349 / 12.74349

= 7549.3

=

Answer 2

Answer:

The installment is Rs.7549.3.

Step-by-step explanation:

Given : An overdraft of rupees 50,000 has to be paid back in annual equal installments.

To find : The value of installment if the interest is 14% compounded annually​ ?

Solution :

Applying Equated annual installment formula,

$EMI=\frac{P\times R\times (1+R)^n}{(1+R)^n-1}$

The principal is P=Rs.50,000

The rate is R=14\%=0.14

n is the number of years n=20

Substitute in the formula,

$EMI=\frac{50000\times 0.14\times (1+0.14)^{20}}{(1+0.14)^{20}-1}$

$EMI=\frac{50000\times 0.14\times (1.14)^{20}}{(1.14)^{20}-1}$

$EMI=\frac{50000\times 0.14\times 13.74349}{13.74349-1}$

$EMI=\frac{96204.43}{12.74349}$

$EMI=7549.300074$

Therefore, The installment is Rs.7549.3.