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A man purchased a house valued at Rs. 300000. He paid Rs. 200000 at the time of purchase
and agreed to pay the balance with interest at 12% per annum compounded half yearly in
20 equal half yearly instalments. If the first instalment is paid after six months from the
date of purchase then the amount of each instalment is?
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A man purchased a house valued at Rs. 300000. He paid Rs. 200000 at th...


Calculation of Each Instalment:

Given:
  • House value: Rs. 300000
  • Amount paid at the time of purchase: Rs. 200000
  • Interest rate: 12% per annum compounded half yearly
  • Number of instalments: 20



Calculating the Remaining Balance:
The remaining balance on the house after the initial payment of Rs. 200000 can be calculated using the compound interest formula:

Balance = Principal x (1 + (r/n))^(nt) - P

Where:

  • P = Principal amount paid initially = Rs. 200000
  • r = Annual interest rate = 12%
  • n = Number of compounding periods per year = 2 (half yearly)
  • t = Total number of years for repayment = 20/2 = 10 years


By substituting the values, we get:

Balance = 200000 x (1 + (0.12/2))^(2*10) - 200000

Balance = 200000 x (1 + 0.06)^20 - 200000

Balance = 200000 x (1.06)^20 - 200000

Balance ≈ 300000 - 200000

Balance ≈ Rs. 100000


Calculating Each Instalment:
To calculate the amount of each instalment, we divide the remaining balance by the present value annuity factor for 20 periods at 6% interest rate (half of 12%):

Each Instalment = Remaining Balance / Present Value Annuity Factor

Each Instalment = Rs. 100000 / Present Value Annuity Factor

By using the formula for Present Value Annuity Factor, we can calculate the amount of each instalment.

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A man purchased a house valued at Rs. 300000. He paid Rs. 200000 at the time of purchase and agreed to pay the balance with interest at 12% per annum compounded half yearly in 20 equal half yearly instalments. If the first instalment is paid after six months from the date of purchase then the amount of each instalment is?
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A man purchased a house valued at Rs. 300000. He paid Rs. 200000 at the time of purchase and agreed to pay the balance with interest at 12% per annum compounded half yearly in 20 equal half yearly instalments. If the first instalment is paid after six months from the date of purchase then the amount of each instalment is? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A man purchased a house valued at Rs. 300000. He paid Rs. 200000 at the time of purchase and agreed to pay the balance with interest at 12% per annum compounded half yearly in 20 equal half yearly instalments. If the first instalment is paid after six months from the date of purchase then the amount of each instalment is? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A man purchased a house valued at Rs. 300000. He paid Rs. 200000 at the time of purchase and agreed to pay the balance with interest at 12% per annum compounded half yearly in 20 equal half yearly instalments. If the first instalment is paid after six months from the date of purchase then the amount of each instalment is?.
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