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X bought a TV costing 25,000 making down payment of Rs. 5000 and agreeing to make equal annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually? [P(4, 0.14) = 2.91371]?
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X bought a TV costing 25,000 making down payment of Rs. 5000 and agree...
Ans.
Example: A sum of Rs. 550 is to be repaid in 2 equal annual installments. If rate =20% compounded annually, then the value of each installment will be?
Let the value of installment be x
Equating the amounts
550*(1.2)^2=x+1.20x
x= Rs. 360
Equating the amounts
550*(1.2)^2=x+1.20x
x= Rs. 360
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X bought a TV costing 25,000 making down payment of Rs. 5000 and agree...
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X bought a TV costing 25,000 making down payment of Rs. 5000 and agree...
Given Information:
X bought a TV costing Rs. 25,000 and made a down payment of Rs. 5,000. X agreed to make equal annual payments for four years. The interest on the unpaid amount is 14% compounded annually.
Solution:
Step 1: Calculate the remaining amount after the down payment
The remaining amount to be paid after the down payment can be calculated as:
Remaining amount = Cost of the TV - Down payment
Remaining amount = Rs. 25,000 - Rs. 5,000
Remaining amount = Rs. 20,000
Step 2: Calculate the annual payment using the formula for the present value of an annuity
To calculate the equal annual payment, we can use the formula for the present value of an annuity:
Present Value = Annual Payment × (1 - (1 + Interest Rate)^(-Number of Years))) / Interest Rate
Given that the interest rate is 14% and the number of years is 4, we can substitute these values into the formula:
Present Value = Annual Payment × (1 - (1 + 0.14)^(-4))) / 0.14
Step 3: Solve for the annual payment
We know that the present value is equal to the remaining amount, so we can substitute the value of the remaining amount into the equation:
Rs. 20,000 = Annual Payment × (1 - (1 + 0.14)^(-4))) / 0.14
Now, we can rearrange the equation to solve for the annual payment:
Annual Payment = Rs. 20,000 × 0.14 / (1 - (1 + 0.14)^(-4))
Using the given value of P(4, 0.14) = 2.91371, we can substitute it into the equation:
Annual Payment = Rs. 20,000 × 0.14 / 2.91371
Step 4: Calculate the annual payment
Now, we can calculate the annual payment:
Annual Payment = Rs. 20,000 × 0.14 / 2.91371
Annual Payment ≈ Rs. 961.78
Therefore, the annual payment for X would be approximately Rs. 961.78.
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X bought a TV costing 25,000 making down payment of Rs. 5000 and agreeing to make equal annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually? [P(4, 0.14) = 2.91371]?
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X bought a TV costing 25,000 making down payment of Rs. 5000 and agreeing to make equal annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually? [P(4, 0.14) = 2.91371]? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about X bought a TV costing 25,000 making down payment of Rs. 5000 and agreeing to make equal annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually? [P(4, 0.14) = 2.91371]? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X bought a TV costing 25,000 making down payment of Rs. 5000 and agreeing to make equal annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually? [P(4, 0.14) = 2.91371]?.
X bought a TV costing 25,000 making down payment of Rs. 5000 and agreeing to make equal annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually? [P(4, 0.14) = 2.91371]? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about X bought a TV costing 25,000 making down payment of Rs. 5000 and agreeing to make equal annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually? [P(4, 0.14) = 2.91371]? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X bought a TV costing 25,000 making down payment of Rs. 5000 and agreeing to make equal annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually? [P(4, 0.14) = 2.91371]?.
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