Arjun buys a house for which he agrees to pay Rs. 5000 at the end of each month for 8
years. If money is worth 12% converted monthly, what is the capital value of the house ?
(a) Rs. 307638.50 (b) Rs. 310825.60 (c) Rs. 25902.75 (d) none of these
Please send
Answers
Answer:
Option (b) correct NSER
Given : Arjun buys a house for which he agrees to pay Rs. 5000 at the end of each month for 8 years.
Money is worth 12% converted monthly,
To Find : the capital value of the house ?
(a) Rs. 307638.50 (b) Rs. 310825.60 (c) Rs. 25902.75 (d) none of these
Solution:
Rate of interest R = 12 % per annum = 1 % per month
n = number of months = 8 * 12 = 96
EMI = 5000
P =?
EMI Formula = [P x (R/100) x (1+(R/100))ⁿ]/[(1+(R/100))ⁿ-1]
=> 5000 = [P x (1/100) x (1+(1/100))⁹⁶]/[(1+(1/100))⁹⁶-1]
=> 5000 = [P x (1/100) x (1.01)⁹⁶]/[(1.01)⁹⁶-1]
=> P = 3,07,638.5
Capital value of the house Rs. 307638.50
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