Question

Mr. Arju wishs to purchase a house . to buy the house he needs to make a down payment of nu.300000 and also pay nu.15000 every quarter for the next 8 years. the interest charge is 9% per year compounded quarterly. what is the price of the house?​

Answer 1

The price of the house is $ 853,735.05.

Explanation:

Since Mr. Arju wishes to purchase a house, and to buy the house he needs to make a down payment of $ 300,000 and also pay $ 15,000 every quarter for the next 8 years, if the interest charge is 9% per year compounded quarterly, to determine what is the price of the house, the following calculation must be performed:

300,000 + (15,000 x 12 x 8) = X

300,000 + (180,000 x 8) = X

300,000 + 1,440,000 = X

1,740,000 = X

X x (1 + 0.09 / 4) ^ 8x4 = 1,740,000

X x (1 + 0.0225) ^ 32 = 1,740,000

X x 1.0225 ^ 32 = 1,740,000

X x 2.0381030257737 = 1,740,000

X = 1,740,000 / 2.03810

X = 853,735.05

Therefore, the price of the house is $ 853,735.05.