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RS. 5000 paid is every year for ten years to pay to off a loan. What is the loan amount if interest rate be 14% per annum compounded interest.?
Most Upvoted Answer
RS. 5000 paid is every year for ten years to pay to off a loan. What i...
Loan Amount Calculation with Compound Interest
Given:
To find: Loan amount
Solution:
Answer: The loan amount is Rs. 31,359.90 (approx) when Rs. 5000 is paid every year for ten years at an interest rate of 14% per annum compounded annually.
Given:
- Annual payment = Rs. 5000
- Number of years = 10
- Interest rate = 14% compounded annually
To find: Loan amount
Solution:
- Let P be the principal amount
- Then, the future value of the annuity is given by the formula:
- FV annuity = P [(1 + r)^n - 1]/r
- where r = interest rate per period and n = number of periods
- Here, r = 14%/1 = 14% and n = 10
- So, FV annuity = P [(1 + 0.14)^10 - 1]/0.14
- Given, annual payment = Rs. 5000
- So, FV annuity = 5000 [(1 + 0.14)^10 - 1]/0.14
- Now, the loan amount (principal) is the present value of the future value of the annuity:
- P = FV annuity / (1 + r)^n
- where r = interest rate per period and n = number of periods
- Here, r = 14%/1 = 14% and n = 10
- So, P = [5000 [(1 + 0.14)^10 - 1]/0.14] / (1 + 0.14)^10
- P = Rs. 31,359.90 (approx)
- Therefore, the loan amount is Rs. 31,359.90 (approx)
Answer: The loan amount is Rs. 31,359.90 (approx) when Rs. 5000 is paid every year for ten years at an interest rate of 14% per annum compounded annually.
Community Answer
RS. 5000 paid is every year for ten years to pay to off a loan. What i...
Ans:27263.6651153
Solution:
loan amount=
present value(annuity)[1-1/(1+i)^n]/i
5000[1-1/(1.14)^10]/0.14
=27263.6651153
Solution:
loan amount=
present value(annuity)[1-1/(1+i)^n]/i
5000[1-1/(1.14)^10]/0.14
=27263.6651153
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RS. 5000 paid is every year for ten years to pay to off a loan. What is the loan amount if interest rate be 14% per annum compounded interest.?
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RS. 5000 paid is every year for ten years to pay to off a loan. What is the loan amount if interest rate be 14% per annum compounded interest.? 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 RS. 5000 paid is every year for ten years to pay to off a loan. What is the loan amount if interest rate be 14% per annum compounded interest.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for RS. 5000 paid is every year for ten years to pay to off a loan. What is the loan amount if interest rate be 14% per annum compounded interest.?.
RS. 5000 paid is every year for ten years to pay to off a loan. What is the loan amount if interest rate be 14% per annum compounded interest.? 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 RS. 5000 paid is every year for ten years to pay to off a loan. What is the loan amount if interest rate be 14% per annum compounded interest.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for RS. 5000 paid is every year for ten years to pay to off a loan. What is the loan amount if interest rate be 14% per annum compounded interest.?.
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