Mr. Faruk Is Planning To Accumulate Tk. 30,00,000 Ten Years From Now To Buy A Branded Car. He Is Deciding To Deposit In An Account That Will Provide Him 12.5% Interest Per Annum

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Mr. Faruk is planning to accumulate Tk. 30,00,000 ten years from now to buy a branded car. He is deciding to deposit in an account that will provide him 12.5% interest per annum:
i. What will be his annual deposit at the beginning of each year?
ii. What will be his quarterly deposit?

1. Annual Installment Calculation

To calculate the equal annual installment (), we use the Capital Recovery Factor (CRF) formula for present value of an ordinary annuity:

Given Data:

Principal Loan Amount (): Tk. 5,00,000
Annual Interest Rate (): 12% or 0.12
Number of Years (): 6 years

Step-by-Step Calculation:

Julia should pay Tk. 1,21,612.86 at the end of each year.

2. Loan Repayment Schedule (Capital Recovery Method)

Interest Paid =
Principal Repaid =
Ending Balance =

Year	Beginning Balance (Tk.)	Annual Installment (Tk.)	Interest Paid (12%) (Tk.)	Principal Repaid (Tk.)	Ending Balance (Tk.)
1	5,00,000.00	1,21,612.86	60,000.00	61,612.86	4,38,387.14
2	4,38,387.14	1,21,612.86	52,606.46	69,006.40	3,69,380.74
3	3,69,380.74	1,21,612.86	44,325.69	77,287.17	2,92,093.57
4	2,92,093.57	1,21,612.86	35,051.23	86,561.63	2,05,531.94
5	2,05,531.94	1,21,612.86	24,663.83	96,949.03	1,08,582.91
6	1,08,582.91	1,21,612.86	13,029.95	1,08,582.91	0.00
Total	—	7,29,677.16	2,29,677.16	5,00,000.00	—

Summary: Over 6 years, Julia pays a total of Tk. 7,29,677.16, where Tk. 5,00,000 goes toward principal repayment and Tk. 2,29,677.16 goes toward total interest.

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