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Ravi availed a house loan of Rs. 15 lac @ 9% ROI repayable in 20 years. Calculate EMI.
a. 12496
b. 12946
c. 13496
d. 13946
Ans - c
Solution:
P = 15 lac
R = 9% / 12 = 0.75% (In EMI or Equated Monthly Installment), we need to find monthly rate, so we divide rate by 12)
T = 12*20 = 240 (In EMI or Equated Monthly Installment, we multiply time with 12)
The formula of EMI = P * R * (1 + R)^T ÷ { (1 + R)^T - 1 }
So,
EMI = 1500000*0.0075*(1+0.0075)^240 ÷ {(1+0.0075)^240 – 1}
= (1500000*0.0075*6.0092) ÷ 5.0092
= 67603 / 5.0092
= 13496
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A loan of Rs. 1 lac is paid back in 5 equal annual installments. The ROI charged is 20% annually. Find the amount of each loan?
a. 33348
b. 33438
c. 34348
d. 34438
Ans - b
Solution:
P = Rs. 100000
T = 5 years
R = 20% p.a. = 0.2%
The formula of EMI =
--------------------------------------------------
P * R * (1 + R)^T ÷ { (1 + R)^T - 1 }
--------------------------------------------------
So,
EMI = 100000 × 0.2 × 1.2^5 ÷ (1.2^5– 1)
= 33438 Ans
We can also solve using PV (OA), Present Value Ordinary Annuity formula as shown in the formula
in pic comment
100000 = P × (1.2^5– 1) ÷ (0.2 ×1.2^5)
100000 = P × 2.9906
P = 33438 Ans
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You will be receiving Rs. 204000 at the end of each year for the next 20 years. If the current discount rate for such a stream of cash is 10%, find the present value of cash flow.
a. 1376767
b. 1736767
c. 1637676
d. 1763737
Ans - b
Solution:
Since 204000 is like EMI. So, to find P, we use the formula of EMI
The formula of EMI =
--------------------------------------------------
P * R * (1 + R)^T ÷ { (1 + R)^T - 1 }
--------------------------------------------------
204000 = P × 0.1 × 1.1^20 ÷ (1.1^20 – 1)
204000 = P × 0.1174596
P = 1736767 Ans
This can be done with PV (OA) Present Value Ordinary Annuity too.
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Mr. X obtained a loan of Rs. 92820 @ 10%, which he has to pay in 4 equal annual installments. Calculate the amount of installment?
a. 22892
b. 22982
c. 28292
d. 29282
Ans - d
Solution:
P = 92820
R = 10% p.a.
(Note: SINCE HERE PAYMENT IS TO ANNUALY, NOT Monthly, Rate IS NOT divided by 12)
T = 4 yrs
(Note: SINCE HERE PAYMENT IS TO BE ANNUALY, NOT Monthly, Time IS NOT multiplied with 12)
So, we can well use EMI formula in this question as we did in questions no 4, 5, 6 & 7
The formula of EMI =
--------------------------------------------------
P * R * (1 + R)^T ÷ { (1 + R)^T - 1 }
--------------------------------------------------
EMI = 92820 × 0.1 × 1.1^4 ÷ (1.1^4– 1)
= 29282 Ans
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Mr. X wants to receive a fixed amount for 15 years by investing Rs. 9 lacs @ 9% ROI. How much he will receive annually?
a. 111356
b. 111536
c. 111563
d. 111653
Ans – d
Solution:
P = 9 lac
R = 9% p.a.
(Note: SINCE HERE PAYMENT IS TO BE RECEIVED ANNUALY, NOT Monthly, Rate IS NOT divided by 12)
T = 15 yrs
(Note: SINCE HERE PAYMENT IS TO BE RECEIVED ANNUALY, NOT Monthly, Time IS NOT multiplied with 12)
So, we can well use EMI formula in this question as we did in questions no 4, 5 & 6.
The formula of EMI =
--------------------------------------------------
P * R * (1 + R)^T ÷ { (1 + R)^T - 1 }
--------------------------------------------------
So,
EMI = 900000 * 0.09 * 1.09^15 ÷ (1.09^15 – 1)
= 111653 Ans
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