BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Lily purchase a RM800 refrigerator through an instalment plan. She have to pay the monthly payment for three years. The interest charge is RM150. What is the frequency of conversion (m) here?
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4
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3
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52
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12
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Explanation:
Detailed explanation-1: -The equation to find the monthly payment for an installment loan is called the Equal Monthly Installment (EMI) formula. It is defined by the equation Monthly Payment = P (r(1+r)^n)/((1+r)^n-1).
Detailed explanation-2: -Examples of installment buying would be a home, a car, or other large purchases that require financing, such as a laptop.
Detailed explanation-3: -The installment price is higher than the cash price because the seller adds a finance charge to the cash price. This charge pays the seller interest on the money and covers the extra cost of doing business on the installment plan. The finance charge is the difference between the installment price and the cash price.
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