Answer to Question #224339 in Financial Math for Jane

Question

rohani buys a washing machine by paying a RM 400 deposit and paying the balance RM 1772 after 5 months. If the interest is 10% compounded monthly, calculate the cash value of the washing machine.

Answer 1

Solution:

Let the balance after deposit be RM $x$ .

Then, after 5 months, amount$=x(1+\dfrac rn)^{nt}$

$1772=x(1+\dfrac{0.1}{12})^{\frac 5{12}\times12} \\ 1772=x(1.042366) \\ x=1699.97\approx1700$

Thus, the cash value of the washing machine is RM (1700+400) = RM 2100.