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3 years ago

Example 31: S borrows 5,00,000 to buy a house. If he pays equal instalments for 20 years

Business

1 answer:

Veronika [31]3 years ago

7 0

Answer:

$58.729

Explanation:

To find the answer, we need to use the present value of an annuity formula.

The formula is:

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

Where X is the annual instalment

P is the present value of the investment (500,000 in this case)(

i is the interest rate (10% in this case)

and n is the number of periods (20 years in this case)

We now plug the amounts into the formula:

500,000 = X [ (1 - (1 + 0.10)^-20) / 0.10 ]

500,000 = X [8.51356]

500,000 / 8.51356 = X

58,729 = X

So the value of the equal annual instalment will be $58.729

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If a firm holds a pure monopoly in the market and is able to sell 5 units of output at $4.00 per unit and 6 units of output at $

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2 years ago

Mongoose Trucking just signed a $3.8 million contract. The contract calls for a payment of $1.1 million today, $1.3 million one

wlad13 [49]

Answer:

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Explanation:

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3 years ago

Assume that a stock is expected to pay dividends at the end of Year 1 and Year 2 of $1.25 and $1.56, respectively. Dividends are

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Answer:

C. $24.55

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2 years ago