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Question

Mr Dev purchased a car paying Rs 90,000 and promising to pay Rs 5000 every 3 months for the next 10 years. The interest is 6% p.a. compounded quarterly. What is the cash value (approximately) of the car ?

A
238467
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B
235467
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C
228467
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D
None of these
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Solution

The correct option is B 238467
We have, A=Rs.5000,n=40 and I=6100×14=0.015
V=AI[1(1+I)n]

V=50000.015[1(1+0.015)40] --- ( 1 )

Let x=(1.015)40
logx=40(0.0064)
logx=0.256=(¯1.7440)
x=antilog(¯1.7440)
x=0.5546
Substitute this value in ( 1 ),
V=50000.015(10.5546)

V=50000.015×0.4454=Rs.148466.67

Total cash value of the car = Rs.90000+Rs.148466.67
Total cash value of car = Rs.2,38,467 approx.

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