Answer to Question #217941 in Financial Math for Aziwe

Question #217941

Mrs mhlauli purchases a new dining table from Bradley , placing an immediate deposit of R2000 and agreeeing to make monthly repayment of R240 for next 5 years.if the annual interest rate is 6% compounded monthly. What is equivalent cash price of the dining room


1
Expert's answer
2021-07-20T04:02:48-0400

given,

downpayment = R2000

A = R240

N = 5

R=6%

m = 12

cash equivalent = down payment + "PV_{r240}"


"=R2000+A\\times(\\frac{1-(1+\\frac{R}{M})^{-M\\times N})}{\\frac{R}{M}})"


"=R2000+R240\\times(\\frac{1-(1+\\frac{0.06}{12})^{-12\\times5}}{\\frac{0.06}{12}})"


"=R2000+R240\\times(\\frac{1-1.005^{-60}}{0.005})"


"=R2000+R240\\times51.73"


"=R2000+R12414.13"


"=R14414.13"


ANSWER: R 14,414.13



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