Question

Tendai bought an empty stand for R240000,00. He made a down payment of R100000,00 and obtained a 20 year mortgage bond for the balance at an interest rate of 19,5% per annum, compounded monthly. The size of his monthly payments are

Answer 1

Given :

The price of the empty stand = Rs 24000000

The down payment amount = Rs 10000000

The balance amount after down payment = Rs 24000000 -  Rs 10000000

                                                                     = Rs 14000000

The loan amount = p = Rs 14000000

The time period for loan = t = 20 years

Number of months = 12 × 20 = 240

The rate of interest = r = 19.5% compounded monthly

To Find :

The monthly payment amount

Solution :

From compound Interest method

Amount = Principal × $(1+\dfrac{Rate}{12\times 100})^{12\times Time}$

             = Rs 14000000 × $(1+\dfrac{19.5}{12\times 100})^{12\times 20}$

             =  Rs 14000000 × $(1.01625)^{240}$

             =  Rs 14000000 × 47.877

             = Rs 670278000

So, The Amount after 20 years = Rs 670278000

The monthly payment amount = $\dfrac{670278000}{240}$

                                                  = Rs 2792825

Hence, The size of monthly payment are Rs 2792825  Answer