Q: A couple borrow rs.10,000 to buy a car. The loan agreement specifies that monthly payement are to be made for 4 years. The annual interst rate is 10%. Determine the monthly payement?

Answer 1

i=interest rate per period(assumed compounded each period)
P=monthly payment
n=number of payments
A=amount borrowed

A(1+i)^n=P((1+i)^n - 1)/(i)

For
i=0.1/12=1/120
A=10000
n=48

Monthly Payment, P
=A(1+i)^n*(i) / ((1+i)^n - 1)
=10000(121/120)^48*(1/120) / ((121/120)^48-1)
=10000 * 0.025363
=253.63

Answer 2

THNX!!!

Answer 3

You're welcome!