Answer :
Loan for Apartment = $ 6,00,000
Monthly repayment of Loan Installment = Principal Payment + Interest = $ 4,000
Bank Interest rate = 4% per year fixed with monthly compounding
Monthly Interest rate = 4% /12 = 0.33% = 0.0033
Number of Months be n
= [ $600000 + ( $600000 x ( ( 1+0.0033)n-1 )) ] / n = $4000
4000n = [ $600000 + ( $600000 x ( ( 1+0.0033)n-1 )) ]
Taking Log of Both Sides
Log ( 4000) + Log n = Log [ $600000 + ( $600000 x ( ( 1+0.0033)n-1 )) ]
3.6021 + Log n = 5. 7782 + (5.7782 + ( n x 0.0140 -0 )
Log 3.6021 n = 11.5564 + 0.0140 n
Taking Antilog of Both Sides
Antilog ( 3.6021 Log n ) = Antilog ( 11.5564 ) + n x Antilog ( 0.0140 )
4000 n = 1200000+ ( -3 + 0.1033 ) n
n = 300 months
It means 25 years ( 300 months / 12 ) is the period of Loan
n =
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