Sampath borrows a loan of Rs.120,000 at an interest rate of 18%. The loan has to be repaid within 2 years in equal monthly installments. Determine the following.
(i) What is the duration of the loan in months ?
(ii) If the interest is charged on the reducing balance, calculate the total interest due.
(iii) What is the total amount due under the reducing loan balance ?
(iv) Find the amount of a monthly installment.
[Guys anyone who knows, please answer it correctly...]
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Answer:
Calculate:
Total P+I (A)
Where: A = P(1 + r/n)^(nt)
Principal (P): $
120,000.00
Rate (R): %
annual
18
Compound (n): Compounding
Monthly (12/Yr)
Time (t in years):
2
Answer:
A = $ 171,540.34
A = P + I where
P (principal) = $ 120,000.00
I (interest) = $ 51,540.34
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