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Sfm query. urgent

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Accountant
595 Points Posted on 03 May 2015
plz tell me the difference between calculate equal annual instalments and calculate equated annual instalments.
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On 03 May 2015 at 19:32 Report
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CA
169 Points Posted on 03 May 2015

equated is including interest and equal is only principal

 

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On 03 May 2015 at 21:44
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Qualified CA
164 Points Posted on 03 May 2015
Equal annual installments : If loan amount is 500000 and you have to repay it in 5 equal annual installments then each installment will be 100000 Equated annual installments : Loan = 500000 term= 6 yrs rate = 15% Installment = 500000/PVAF(15%,6)
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On 03 May 2015 at 23:21
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Qualified CA
164 Points Posted on 03 May 2015
But you should keep it in mind that if the question says repay the PRINCIPAL in 5 equal annual installments then you need to divide the loan amount by 5. But if it only says repay the LOAN in 5 equal/equated installments then use the PVAF formula.
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On 03 May 2015 at 23:54


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