Doubt- sfm financial services in india

Following is a question given in the May RTP. Can't we solve it using it using Annualised Net PVCO? I didnt follow the solution given )You have a housing loan with one of India’s top housing finance companies. The amount outstanding is Rs. 1,89,540. You have now paid an instalment. Your next instalment falls due a year later. There are five more instalments to go, each being Rs. 50,000. Another housing finance company has offered to take over this loan on a seven year repayment basis. You will be required to pay Rs. 36,408 p.a. with the first instalment falling a year later. The processing fee is 3% of amount taken over. For swapping you will have to pay Rs. 12,000 to the first company. Should you swap the loan ? Solution : Present Interest Rate :For a loan of Rs. 1,89,540 annuity being Rs. 50,000, PVAF = 3.791 (Rs. 1,89,540 / Rs. 50,000).Looking at PVAF Table for 5 years,3.791 comes under 10%. Therefore Current Interest Rate = 10% New Interest Rate :For a similar loan, annuity being Rs. 36,408, PVAF = 5.206 (Rs. 1,89,540 / Rs. 36,408) From PVAF table for 7 years, this corresponds to 8%. Interest Rate is prima facie beneficial.However there are some additional charges which must also be taken. Additional Charges (i) Swap Charges Rs. 12,000 (ii) Processing fee 3% on loan amount (3/100 x Rs.1,89,540) = Rs. 5,686 Considering these two factors, Effective Rate of Interest (IRR) = 10.48% Hint:189540=36408 x PVAF(7 years,r%)+17686 ⇒ PVAF(7 years,r%) = 4.7202 At 10% PVAF will be 4.8684;At 11% PVAF will be 4.712