Mathematics for FinanceMTP March 21Question 1515 of 512
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Antil bought a motor cycle costing 1,50,000\displaystyle 1,50,000 by making a down payment of 50,000\displaystyle 50,000 and agreeing to make equal annual payment for five years. How much would be each payment if the interest on unpaid amounts be 10%\displaystyle 10\% compounded annually? [P(5,0.10)=3.79079]\displaystyle [P(5,0.10) = 3.79079]

Options

A26379.66\displaystyle 26379.66
B26370.70\displaystyle 26370.70
C26500.70\displaystyle 26500.70
D26300.70\displaystyle 26300.70
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Correct Answer

✅ Option a — 26379.66\displaystyle 26379.66

All Options:

  • A26379.66\displaystyle 26379.66
  • B26370.70\displaystyle 26370.70
  • C26500.70\displaystyle 26500.70
  • D26300.70\displaystyle 26300.70

Detailed Solution & Explanation

The remaining balance to be financed after the down payment is: Balance=1,50,000−50,000=1,00,000\text{Balance} = 1,50,000 - 50,000 = 1,00,000 The annual instalment P\displaystyle P is: P=BalanceP(5,0.10)P = \frac{\text{Balance}}{P(5, 0.10)} Given: * Annuity factor P(5,0.10)=3.79079\displaystyle P(5, 0.10) = 3.79079 Substituting the values: P=1,00,0003.79079≈26,379.66P = \frac{1,00,000}{3.79079} \approx 26,379.66 Hence, **Option A** is the correct answer.

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