Mini wants to buy a scooter for Rs 62,000 . She has only Rs 19,000 with her, so she decides to take a loan from a bank for the r
emaining amount. The bank offers Mini three loan schemes as shown below. Mini has to return the loan amount with interest in equal monthly instalments
2) Which among the given schemes offers a monthly instalment of less than Rs 5000. ?
a) Scheme A
b) Scheme B
c) Scheme C
d) Both Scheme A and Scheme B
2) Which among the given schemes offers a monthly instalment of less than Rs 5000. ?
a) Scheme A
b) Scheme B
c) Scheme C
d) Both Scheme A and Scheme B
2 answers:
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Answer:
Part A)
About $3767.34.
Part B)
About $3692.47.
Step-by-step explanation:
Part A)
Recall that compound interest is given by the formula:
Where <em>A</em> is the final amount, <em>P</em> is the initial amount, <em>r</em> is the interest rate, <em>n</em> is the number of times compounded per year, and <em>t</em> is the number of years.
To obtain $4000 after two years, let <em>A</em> = 4000 and<em> t</em> = 2.
Because the account pays 3% interest compounded monthly, <em>r</em> = 0.03 and <em>n</em> = 12.
Substitute and solve for <em>P: </em>
<em />
In concluion, about $3767.34 should be deposited.
Part B)
Recall the formula for continuous compound:
Where <em>e</em> is Euler's number.
Hence, let <em>A</em> = 4000, <em>r</em> = 0.04 and <em>t</em> = 2. Substitute and solve for <em>P: </em>
<em />
In conclusion, about $3692.47 should be deposited.