Ram takes a loan of Rs. 10, 00, 000 at 12% interest rate. The loan is to be repaid in equal installments starting 1 year from now. Ram plans to repay the loan within 10 years from now. a) Calculate the equal value of the payments. b) Due to financial constraints, ram was not able to pay the installment on the 3rd year. Calculate the new equal installments to be paid to complete the loan within the same timeline as before. Draw a cash flow diagram.
Ram takes a loan of Rs. 10, 00, 000 at 12% interest rate. The loan is to be repaid in equal installments starting 1 year from now. Ram plans to repay the loan within 10 years from now. a) Calculate the equal value of the payments. b) Due to financial constraints, ram was not able to pay the installment on the 3rd year. Calculate the new equal installments to be paid to complete the loan within the same timeline as before. Draw a cash flow diagram.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Ram takes a loan of Rs. 10, 00, 000 at 12% interest rate.
The loan is to be repaid in equal installments starting 1
year from now. Ram plans to repay the loan within 10
years from now. a) Calculate the equal value of the
payments. b) Due to financial constraints, ram was not
able to pay the installment on the 3rd year. Calculate the
new equal installments to be paid to complete the loan
within the same timeline as before. Draw a cash flow
diagram.
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