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
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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