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Y bought Motor Bike Costing 80,000 by making down payment of Rs. 30000 and agreeing to make annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually. [Given P (4, 0.14) = 2.91371]
- a)Rs. 17160.25
- b)Rs. 17600.25
- c)Rs.15600.25
- d)Rs. 16600.25
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
Y bought Motor Bike Costing 80,000 by making down payment of Rs. 30000...
Given information:
- Cost of Motor Bike = Rs. 80,000
- Down Payment = Rs. 30,000
- Annual payment to be made for 4 years
- Interest rate = 14% compounded annually
- P(4,0.14) = 2.91371
To find: Each payment that needs to be made annually
Solution:
1. Calculate the amount that needs to be paid annually (excluding interest) using the formula:
Annual Payment = (Cost of bike - Down Payment) / Number of years
Annual Payment = (80,000 - 30,000) / 4 = Rs. 12,500
2. Calculate the interest rate factor (P) for 4 years and 14% interest rate using the table provided:
P(4,0.14) = 2.91371
3. Calculate the total amount that needs to be paid (including interest) using the formula:
Total Payment = Annual Payment x P
Total Payment = 12,500 x 2.91371 = Rs. 36,420.88
4. Calculate the amount of interest paid each year using the formula:
Interest Paid = Total Payment - Annual Payment
Interest Paid = 36,420.88 - 12,500 = Rs. 23,920.88
5. Calculate the amount of principal paid each year using the formula:
Principal Paid = Annual Payment - Interest Paid
Principal Paid = 12,500 - 23,920.88 = Rs. -11,420.88
(Note: A negative value means that the borrower is not paying enough to cover the interest)
6. Adjust the annual payment amount to cover the interest by adding the interest paid to the original annual payment:
Adjusted Annual Payment = Annual Payment + Interest Paid
Adjusted Annual Payment = 12,500 + 23,920.88 = Rs. 36,420.88
7. Therefore, each payment that needs to be made annually is Rs. 36,420.88.
However, this value is the total payment (principal + interest) for each year. To find the actual principal payment, we need to subtract the interest paid from this value:
Actual Principal Payment = Adjusted Annual Payment - Interest Paid
Actual Principal Payment = 36,420.88 - 23,920.88 = Rs. 12,500
Therefore, each payment that needs to be made annually is Rs. 12,500.
Answer: Option A (Rs. 17,160.25) is incorrect. The correct answer is option A (Rs. 12,500).
- Cost of Motor Bike = Rs. 80,000
- Down Payment = Rs. 30,000
- Annual payment to be made for 4 years
- Interest rate = 14% compounded annually
- P(4,0.14) = 2.91371
To find: Each payment that needs to be made annually
Solution:
1. Calculate the amount that needs to be paid annually (excluding interest) using the formula:
Annual Payment = (Cost of bike - Down Payment) / Number of years
Annual Payment = (80,000 - 30,000) / 4 = Rs. 12,500
2. Calculate the interest rate factor (P) for 4 years and 14% interest rate using the table provided:
P(4,0.14) = 2.91371
3. Calculate the total amount that needs to be paid (including interest) using the formula:
Total Payment = Annual Payment x P
Total Payment = 12,500 x 2.91371 = Rs. 36,420.88
4. Calculate the amount of interest paid each year using the formula:
Interest Paid = Total Payment - Annual Payment
Interest Paid = 36,420.88 - 12,500 = Rs. 23,920.88
5. Calculate the amount of principal paid each year using the formula:
Principal Paid = Annual Payment - Interest Paid
Principal Paid = 12,500 - 23,920.88 = Rs. -11,420.88
(Note: A negative value means that the borrower is not paying enough to cover the interest)
6. Adjust the annual payment amount to cover the interest by adding the interest paid to the original annual payment:
Adjusted Annual Payment = Annual Payment + Interest Paid
Adjusted Annual Payment = 12,500 + 23,920.88 = Rs. 36,420.88
7. Therefore, each payment that needs to be made annually is Rs. 36,420.88.
However, this value is the total payment (principal + interest) for each year. To find the actual principal payment, we need to subtract the interest paid from this value:
Actual Principal Payment = Adjusted Annual Payment - Interest Paid
Actual Principal Payment = 36,420.88 - 23,920.88 = Rs. 12,500
Therefore, each payment that needs to be made annually is Rs. 12,500.
Answer: Option A (Rs. 17,160.25) is incorrect. The correct answer is option A (Rs. 12,500).
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Community Answer
Y bought Motor Bike Costing 80,000 by making down payment of Rs. 30000...
Cost- Rs 80,000
Down Payment - Rs 30,000
Balance - Rs50,000
Now,
PV= R/i (1+i)^n -1/ (1+i)^n -1)
50,000= R/0.14 ( (1.14)^4 -1/ (1.14)^4)
7000= R(1.6889-1/1.6889)
7000/0.4079= R
R= Rs 17160.25
Down Payment - Rs 30,000
Balance - Rs50,000
Now,
PV= R/i (1+i)^n -1/ (1+i)^n -1)
50,000= R/0.14 ( (1.14)^4 -1/ (1.14)^4)
7000= R(1.6889-1/1.6889)
7000/0.4079= R
R= Rs 17160.25
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Y bought Motor Bike Costing 80,000 by making down payment of Rs. 30000 and agreeing to make annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually. [Given P (4, 0.14) = 2.91371]a)Rs. 17160.25b)Rs. 17600.25c)Rs.15600.25d)Rs. 16600.25Correct answer is option 'A'. Can you explain this answer?
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Y bought Motor Bike Costing 80,000 by making down payment of Rs. 30000 and agreeing to make annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually. [Given P (4, 0.14) = 2.91371]a)Rs. 17160.25b)Rs. 17600.25c)Rs.15600.25d)Rs. 16600.25Correct answer is option 'A'. Can you explain this answer? 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 Y bought Motor Bike Costing 80,000 by making down payment of Rs. 30000 and agreeing to make annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually. [Given P (4, 0.14) = 2.91371]a)Rs. 17160.25b)Rs. 17600.25c)Rs.15600.25d)Rs. 16600.25Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Y bought Motor Bike Costing 80,000 by making down payment of Rs. 30000 and agreeing to make annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually. [Given P (4, 0.14) = 2.91371]a)Rs. 17160.25b)Rs. 17600.25c)Rs.15600.25d)Rs. 16600.25Correct answer is option 'A'. Can you explain this answer?.
Y bought Motor Bike Costing 80,000 by making down payment of Rs. 30000 and agreeing to make annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually. [Given P (4, 0.14) = 2.91371]a)Rs. 17160.25b)Rs. 17600.25c)Rs.15600.25d)Rs. 16600.25Correct answer is option 'A'. Can you explain this answer? 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 Y bought Motor Bike Costing 80,000 by making down payment of Rs. 30000 and agreeing to make annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually. [Given P (4, 0.14) = 2.91371]a)Rs. 17160.25b)Rs. 17600.25c)Rs.15600.25d)Rs. 16600.25Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Y bought Motor Bike Costing 80,000 by making down payment of Rs. 30000 and agreeing to make annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually. [Given P (4, 0.14) = 2.91371]a)Rs. 17160.25b)Rs. 17600.25c)Rs.15600.25d)Rs. 16600.25Correct answer is option 'A'. Can you explain this answer?.
Solutions for Y bought Motor Bike Costing 80,000 by making down payment of Rs. 30000 and agreeing to make annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually. [Given P (4, 0.14) = 2.91371]a)Rs. 17160.25b)Rs. 17600.25c)Rs.15600.25d)Rs. 16600.25Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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Y bought Motor Bike Costing 80,000 by making down payment of Rs. 30000 and agreeing to make annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually. [Given P (4, 0.14) = 2.91371]a)Rs. 17160.25b)Rs. 17600.25c)Rs.15600.25d)Rs. 16600.25Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Y bought Motor Bike Costing 80,000 by making down payment of Rs. 30000 and agreeing to make annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually. [Given P (4, 0.14) = 2.91371]a)Rs. 17160.25b)Rs. 17600.25c)Rs.15600.25d)Rs. 16600.25Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Y bought Motor Bike Costing 80,000 by making down payment of Rs. 30000 and agreeing to make annual payment for four years. How much would be each payment if the interest on unpaid amount be 14% compounded annually. [Given P (4, 0.14) = 2.91371]a)Rs. 17160.25b)Rs. 17600.25c)Rs.15600.25d)Rs. 16600.25Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
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