Monika buys a refrigerator for $42,000. She makes a down payment of

Question

Monika buys a refrigerator for $42,000. She makes a down payment of $12,000 and pays the remaining amount in 4 equal half-yearly installments. If the store charges an interest of 10% per annum, approximately how much does Monika have to pay every six months?

A. 8,230
B. 8,460
C. 8,600
D. 8,620
E. 8,800

Monika buys a Samsung's 360 litre refrigerator from M/s Coldrush Agencies for Rs 42,000. She makes a down payment of Rs 12,000 and the remaining amount in 4 equal half yearly instalments. If M/s Coldrush Agencies charge an interest of 10% per annum, approximately what amount Monika has to pay every six month?

onlymalapink · Answer

Hi, Any guidance on this question?

Posted from my mobile device

PietroMeltzer · Answer

You have to use the Equal Monthly Installment (EMI) formula:

EMI = P * r * ( 1 + r )^n /

EMI = 30000 * 0.05 * ( 1 + 0.05 )^4 /   = 8460
= 30000 * 1.21550625 / 0.21550625
= 30000 * 0.05 * 5.640236652
= 30000 * 0282011833
= 8460.335498

Wich in my opinion, if you are trying to do under 2 min, gotta be real fast with the calculations.
Does anyone know a faster way, or if we can do it by approximation?

versewriter · Answer

Total cost is $42,000

Out of which $12,000 already paid as down payment. Remaining $30,000 is be pain in equal Installments i.e. $7500 plus Insterest as 10% semi annually. So,

First Installment will be $7500 (equal Installment) plus $30,000 * 10 * 6/12 (Interest) i.e. $7500 + 1500

Second Installment will be $7500 (equal Installment) plus $22500 * 10 * 6/12 (Interest) i.e. $7500 + 1125

Third Installment will be $7500 (equal Installment) plus $15000 * 10 * 6/12 (Interest) i.e. $7500 + 750

Fourth Installment will be $7500 (equal Installment) plus $7500 * 10 * 6/12 (Interest) i.e. $7500 + 375

So Total will Be $30,000 plus $3750 i.e. $33750

i.e. $33750 / 4 = $8437.5

Approx 8460 i.e. Option B

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Monika buys a refrigerator for $42,000. She makes a down payment of

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