Question

Mr. Nirav borrowed Rs 50,000 from the bank for 5 years. The rate of interest is 9% per annum compounded monthly. Find the payment he makes monthly if he pays back at the beginning of each month.

Answer 1

`P = (c(1 + i))/i [1 - (1 + i)^(-n)]` 

`P = 50000                i = 9/(12 xx 100) = 0.0075`

`:. 50000 = ((c(1.0075))/(0.0075)) xx [1 - 1/(1.0075)^60]`

`c = (50000 xx 0.0075 xx 1.56568103)/(0.56568103 xx 1.0075)`

c = 1045.702