Math Problem Statement
James is considering buying a car for R140 000. The bank has quoted him an interest rate of 12% per annum, compounded monthly. If he wishes to repay the principal amount over 50 months. Calculate his monthly instalment?
Solution
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Math Problem Analysis
Mathematical Concepts
Loan Amortization
Compound Interest
Monthly Instalments
Formulas
M = P * r * (1 + r)^n / [(1 + r)^n - 1] (Loan Payment Formula)
r = Annual Interest Rate / 12 (Monthly Interest Rate Calculation)
Theorems
Loan Amortization Theorem
Compound Interest Theorem
Suitable Grade Level
Grades 10-12 (Senior Secondary or Introductory College Level)
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