question archive a contract can be filled by making an immediate payment of 3247 or equal payments at the end of every six months for 4 years
a contract can be filled by making an immediate payment of 3247 or equal payments at the end of every six months for 4 years
Subject:MathPrice:4.89 Bought3
a contract can be filled by making an immediate payment of 3247 or equal payments at the end of every six months for 4 years. what is the size of the semi- annual payment at 7% per annum compouded quartely?
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As P= r x A/(1-(1+r)-n)
Where,
P= amount of one of the equal installments
A= Present value of Loan
n= no of periods
r= rate of interest per period
So,According to our question,we get:
n=4x2=8
r=(7/3+7x1/6)/100+ interest on interest for 2 months=0.0356(approx)
A=3247
Therefore,
P=0.0356 x 3247/(1-1.0356-8)
P= 473.6 is the semi annual payment to be made for coring loan in given amount(Answer)
