Question

Ram purchased a house for which he agreed to pay Rs. 5000 at the beginning of each 3
months until he has made 10 payments. If money is worth 6% compounded quarterly,
what is the equivalent cash price of the house ?

pls answer quickly

Answer 1

Answer:

Without any sort of interest it would cost around Rs. 47,125.35 (approx).

Step-by-step explanation:

As per the data given in the question,

We have,

Money he paid per 3 months = Rs. 5000

Time = 30 months = 2.5 years

Total money he paid after 10 payement = Rs. 50000

So, Amount(A) = Rs 50000

Rate(R) = 6%

Since compounded quaterly:

$A=P[1 + (\frac{r}{4} )]^{4t}\\50000=P(1+(0.015))^{10}\\50000=P\times 1.061\\P=\frac{50000}{1.061}\\ P=47,125.35$

Hence, without any sort of interest it would cost around Rs. 47,125.35 (approx).

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Answer 2

Answer: Equivalent cash price of the house = Rs39008

Concept: P = {R[1- (1+i)^-n]*(1+i)}/i

i = compound rate

R = Installment amount

n = no of installments

Given: R = Rs5000

i = 0.06

n = 10

To find: Equivalent cash price of the house

Step-by-step explanation:

Ram is paying RS 5000 at the beginning of 3months.

He has to pay 10 installments.

1 quarter = 3 months

We have the formula

P = {R[1- (1+i)^-n]*(1+i)}/i

R = Rs5000

i = 0.06

n = 10

Putting values in the above equation

P = {R[1- (1+i)^-n]*(1+i)}/i

P = {5000[1- (1+0.06)^-10]*(1+0.06)}/0.06

P = {5000[1- (1+0.06)^-10]*(1+0.06)}/0.06

P = Rs39008

Equivalent cash price of the house = Rs39008

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