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What will be the equal annual installment if a loan of Rs 30000 is being paid in 5 annual installments with interest rate of 12\% pa?

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What will be the equal annual installment if a loan of Rs 30000 is being paid in 5 annual installments with interest rate of 12\% pa?

Principal amount (P) = 30,000 Rs. Interest applied 5 annual installment at the rate of (R) 12\% = 18,000 Rs. Total interest amount for 5 years = 30,000 + 18,000 = 48,000 Rs. Equated annual instalment = 48,000/5 = 9,600.

How is equated annual installment calculated?

The EMI amount is calculated by adding the total principal of the loan and the total interest on the principal together, then dividing the sum by the number of EMI payments, which is the number of months during the loan term.

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What is equated annual installment?

Equated instalments pay off varying proportions of interest and principal within each period, so that by the end, the loan has been paid off in full. The equated instalments deal nicely with our cash flow problem, but the interest charges still seem complicated.

How do you calculate annual installment in simple interest?

Explanation: Installments paid at the end of 1st, 2nd, 3rd and 4th years earn a simple interest at 12\% p.a. for 3, 2, 1 and 0 years respectively. Hence the respective installments amount to, (100 + 3 x 12), (100 + 2 x 12), (100 + 1 x 12) and 100, when annual installment is Rs 100.

How do you calculate effective annual rate from APR?

The formula and calculations are as follows:

  1. Effective annual interest rate = (1 + (nominal rate / number of compounding periods)) ^ (number of compounding periods) – 1.
  2. For investment A, this would be: 10.47\% = (1 + (10\% / 12)) ^ 12 – 1.
  3. And for investment B, it would be: 10.36\% = (1 + (10.1\% / 2)) ^ 2 – 1.
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How is half yearly installment calculated?

If interest is compounded half yearly, rate of interest = R / 2 and A = P [ 1 + ( {R / 2} / 100 ) ]T, where ‘T’ is the time period. For example, if we have to calculate the interest for 1 year, then T = 2.

How do you calculate equated monthly installment in Excel?

Calculating EMI has a Simple Formula, Which is As Follows: EMI = (P X R/12) X [(1+R/12) ^N] / [(1+R/12) ^N-1]. Here, P is the original loan amount or principal, R is the rate of interest that is applicable per annum and N is the number of monthly installments/ loan tenure.

How is loan installment amount calculated?

USING MATHEMATICAL FORMULA EMI = [P x R x (1+R)^N]/[(1+R)^N-1], where P stands for the loan amount or principal, R is the interest rate per month [if the interest rate per annum is 11\%, then the rate of interest will be 11/(12 x 100)], and N is the number of monthly instalments.

What is loan annuity?

Annuities are basically loans that are paid back over a set period of time at a set interest rate with consistent payments each period. A mortgage or car loan are simple examples of an annuity.

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What are annual installments?

Annual Installments means a series of amounts to be paid annually over a predetermined period of years in substantially equal periodic payments, except to the extent any increase in the amount reflects reasonable earnings through the date the amount is paid.

How do you calculate effective annual rate?

What is 24\% APR on a credit card?

If you have a credit card with a 24\% APR, that’s the rate you’re charged over 12 months, which comes out to 2\% per month. Since months vary in length, credit cards break down APR even further into a daily periodic rate (DPR). It’s the APR divided by 365, which would be 0.065\% per day for a card with 24\% APR.