If A is the amount of obligation, r is the rate of interest per payment period and $i=\frac{r}{100},$ then the amount of each payment can be calculated using which of the following formulae, where n is the number of payment s?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → $R=\left[\frac{A×i}{(1+i)^{-n}}\right]$
Using the loan Amortization,
$R=\frac{A.i}{1-(1+i)^{-n}}$
where,
$A$ = Total obligation
$r$ = Rate of interest per payment period
$n$ = Number of Payments