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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]
  • a)
    Rs.6864.10
  • b)
    Rs.6850.63
  • c)
    Rs.6859
  • d)
    Rs.6871
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
X bought a TV costing 25,000 making down payment of Rs. 5000 and agree...
Given:
Cost of TV = Rs. 25,000
Down Payment = Rs. 5,000
Number of years = 4
Interest rate = 14% compounded annually
Using the formula for present value of an annuity, we can calculate the equal annual payment that needs to be made for four years as follows:

Calculation:
PV = C * [1 - (1 + r)^(-n)] / r - D * (1 + r)^(-n)
where,
PV = Present value of the TV
C = Annual payment to be made
r = Rate of interest per annum
n = Number of years
D = Down payment made at the time of purchase

Substituting the given values, we get:
20000 = C * [1 - (1 + 0.14)^(-4)] / 0.14 - 5000 * (1 + 0.14)^(-4)
20000 = C * [1 - 0.51943] / 0.14 - 5000 * 0.5921
20000 = C * 2.91371 - 2960.50
C * 2.91371 = 22960.50
C = 22960.50 / 2.91371
C = 7864.10

Therefore, the equal annual payment that needs to be made for four years is Rs. 6864.10 (approx.). Hence, option A is the correct answer.
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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]a)Rs.6864.10b)Rs.6850.63c)Rs.6859d)Rs.6871Correct answer is option 'A'. Can you explain this answer?
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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]a)Rs.6864.10b)Rs.6850.63c)Rs.6859d)Rs.6871Correct 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 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]a)Rs.6864.10b)Rs.6850.63c)Rs.6859d)Rs.6871Correct 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 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]a)Rs.6864.10b)Rs.6850.63c)Rs.6859d)Rs.6871Correct answer is option 'A'. Can you explain this answer?.
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