Munna purchased LED TV paying RS.5000 down and promising to pay RS.200 every quarter for the next 10years. The seller charged interest at the rate of 12%p.a.compoubdef quarterly. If Munna missed the first 10 payments, what must he pay when the 11th payment is due to discharge his entire loan ?
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Munna Need to Pay Rs 6,399.25 to discharge his entire loan
Step-by-step explanation:
Rs 200 Every Quarter for Next 10 years
=> 40 Quarters
Interest rate = 12 % pa = 3 % Per Quarter
P - Amount to be Paid
200 = P * (3/100) ( 1 + 3/100)⁴⁰ /( ( 1 + 3/100)⁴⁰ - 1)
=> P = 4,622.95
Amount after missing 10 Payment => paid after 11 Quarters
Amount after 11 Quarters = 4,622.95 ( 1 + 3/100)¹¹
= 6,399.25
Munna Need to Pay Rs 6,399.25 to discharge his entire loan
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