Mr. x borrowed a loan of Rs.5000000 for a period of 5 years to be repaid in equated half yearlyinstalment at an interest rate of 12% per annum. prepare a loan repayment schedule showing payments. Generalize. the sheet to incorporate any changes in year,amount,rate or periodicity. you are required to write down the formulas in the approprite cells.
Attachments:
Answers
Answered by
1
Explanation:
Given Mr. x borrowed a loan of Rs.5000000 for a period of 5 years to be repaid in equated half yearly instalment at an interest rate of 12% per annum. prepare a loan repayment schedule showing payments. Generalize. the sheet to incorporate any changes in year,amount,rate or periodicity. you are required to write down the formulas in the appropriate cells.
- An equated instalment is an instalment of equal value to other instalments.
- Now equated instalment = principal / annuity factor
- So the annuity factor is the ratio of the equated annual instalment to the principal borrowed at the beginning.
- So the annuity factor is given by AF = 1 – (1 + r)^-n / r
- So r = interest rate / period = 5% = 0.05
- So n = number of periods = 4 years
- So we have
- AF = (1 – 1 / (1 + r)^n ÷ r )
- = (1 + r)^n – 1 / (1 + r)^n ÷ r
- = (1 + 0.05)^4 – 1 / (1 + 0.05)^4 / 0.05
- = (1.05)^4 – 1 / (1.05)^4 / 0.05
- = 0.21550625 / 1.21550625 / 0.05
- = 3.54
Reference link will be
https://brainly.in/question/21443457
Similar questions