Homework Answers
EMI = P×r×(1+r)n/[(1+r)n-1]
Where,
P=Principal=300000
r=monthly interest=0.05/12=0.004167
n=tenure=number of years×12=20×12=240
Therefore,
EMI = 300000×0.004167×(1+0.004167)240/[(1+0.004167]240-1]
= 1250.1×2.71286/1.71286
= $1,979.93
(9) (c) $1980
(10) 
(d) May 31st, 2032
(11)
Note: It is assumed that payment is yearly payment and it is received at the end of every year
Present Value of Perpetuity = Payment Receivable in 1st year/(discount rate - growth rate)
= 500/(2%-1%)
= 50000
(e) $50,000
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