0
Q:

# Kramer borrowed $4000 from George at an interest rate of 7% compounded semiannually. The loan is to be repaid by three payments. The first payment,$1000, is due two years after the date of the loan. The second and third payments are due three and five years, respectively, after the initial loan. Calculate the amounts of the second and third payments if the second payment is to be twice the size of the third payment.

 A) 1389 B) 1359 C) 1379 D) 1339.33

Explanation:

Given:j=7% compounded semiannually making m=2 and i = j/m= 7%/2 = 3.5%
Let x represent the third payment. Then the second payment must be 2x.
PV1,PV2, andPV3 represent the present values of the first, second, and third payments.

Since the sum of the present values of all payments equals the original loan, then
PV1 + PV2  +PV3  =$4000 -------(1) PV1  =FV/(1 + i)^n  =$1000/(1.035)^4=  $871.44 At first, we may be stumped as to how to proceed for PV2 and PV3. Let’s think about the third payment of x dollars. We can compute the present value of just$1 from the x dollars

pv=1/(1.035)^10=0.7089188

PV2   =2x * 0.7089188 = 1.6270013x
PV3   =x * 0.7089188=0.7089188x
Now substitute these values into equation ➀ and solve for x.
$871.442 + 1.6270013x + 0.7089188x  =$4000

2.3359201x  =$3128.558 x=$1339.326
Kramer’s second payment will be 2($1339.326)  =$2678.65, and the third payment will be \$1339.33

Q:

If Rs. 2,000 is invested at the rate of 20% per annum, compounded half-yearly, then the amount after 18 months will be:

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Explanation:

0 362
Q:

Calculate the principal if an amount of Rs. 441 is received on compound interest at the rate of 5% per annum after 2 years.

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Explanation:

2 289
Q:

Gitesh took a loan for 4 years at 5% Compound Interest. If the total interest paid was Rs. 431.01, Calculate the principal.

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Explanation:

0 275
Q:

A sum of Rs 20000 becomes Rs 32000 in 12 years, when invested in a scheme of simple interest. If the same sum is invested in a scheme of compound interest with same yearly interest rate (compounding of interest is done yearly), then what will be the amount (in Rs) after 2 years?

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Explanation:

0 235
Q:

A sum of Rs 4000 becomes Rs 5800 in 3 years, when invested in a scheme of simple interest. If the same sum is invested in a scheme of compound interest with same yearly interest rate (compounding of interest is done yearly), then what will be the amount (in Rs) after 2 years?

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Explanation:

1 245
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Explanation:

1 251
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Explanation:

4 548
Q:

A sum of Rs 6000 becomes Rs 7200 in 2 years, when invested in a scheme of simple interest. If the same sum is invested in a scheme of compound interest with same yearly interest rate (compounding of interest is done yearly), then what will be the amount (in Rs) after 3 years?

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