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Let us denotes R=Periodic payment,i=interest per period per rupee ,n=number of payment,P=pricipal payment

Match the terms in List I with their respective formula in List II.

LIST-ILIST-II
A. The amount in a sinking fund after nn period with payment at endI. Pi(1+i)n(1+i)n−1\dfrac{Pi(1+i)^n}{(1+i)^n - 1}
B. EMI by using flat rate methodII. P(i+1n)P\left(i + \dfrac{1}{n}\right)
C. The amount in a sinking fund after nn period with payment at beginningIII. R{(1+i)n−1i}R\left\{\dfrac{(1+i)^n - 1}{i}\right\}
D. EMI by using reducing balance payment rate methodIV. R(1+i)[(1+i)n−1i]R(1+i)\left[\dfrac{(1+i)^n - 1}{i}\right]

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 3

An ordinary annuity (payment at end) accumulates to R[(1+i)n−1i]R\left[\dfrac{(1+i)^n-1}{i}\right] (III).

The flat rate EMI adds interest on the whole principal, giving P(i+1n)P\left(i+\dfrac{1}{n}\right) (II).

Payments at the beginning earn one extra period, giving the same amount multiplied by (1+i)(1+i) (IV).

The reducing balance EMI is Pi(1+i)n(1+i)n−1\dfrac{Pi(1+i)^n}{(1+i)^n-1} (I).

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