math

Q: A couple borrow rs.10,000 to buy a car. The loan agreement specifies that monthly payement are to be made for 4 years. The annual interst rate is 10%. Determine the monthly payement?

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  1. i=interest rate per period(assumed compounded each period)
    P=monthly payment
    n=number of payments
    A=amount borrowed

    A(1+i)^n=P((1+i)^n - 1)/(i)

    For
    i=0.1/12=1/120
    A=10000
    n=48

    Monthly Payment, P
    =A(1+i)^n*(i) / ((1+i)^n - 1)
    =10000(121/120)^48*(1/120) / ((121/120)^48-1)
    =10000 * 0.025363
    =253.63

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  2. THNX!!!

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    posted by REHAN
  3. You're welcome!

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