A loan of ₹200000 at the interest rate of 6% p.a. compounded monthly is to be amortized by equal payments at the end of each month for 5 years. The monthly payment is :
[Given $(1.005)^{-60}=0.74137220$]
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹3,866.57
Monthly payment, $M=\frac{P×r×(1+r)^n}{(1+r)^n-1}$
P = Principle loan amount
r = Monthly interest rate
$∴M=\frac{200000×0.005×(1+0.005)^{60}}{(1+0.005)^{60}-1}$
$=\frac{200000×0.005×1.34885}{1.34885-1}$
$≃3866.57$