After paying a deposit, buyer acquired a refrigerator by agreeing to pay the remaining balance of K2500 in fortnightly installments at 10% per annum over a period of 30 months. Calculate the fortnightly installments 

To calculate the fortnightly installments for the remaining balance of K2500 at an interest rate of 10% per annum over a period of 30 months, we can use the formula for the payment of an installment loan:

\[
PMT = \frac{P \times r \times (1 + r)^n}{(1 + r)^n - 1}
\]

Where:
- \(PMT\) is the fortnightly installment payment.
- \(P\) is the principal amount (K2500).
- \(r\) is the interest rate per period.
- \(n\) is the total number of periods.

### Step 1: Convert the annual interest rate to a fortnightly interest rate
Since there are 26 fortnights in a year, the fortnightly interest rate \(r\) is:

\[
r = \frac{10\%}{26} = \frac{0.10}{26} \approx 0.003846
\]

### Step 2: Calculate the total number of periods \(n\)
The total number of fortnights in 30 months is:

\[
n = 30 \times \frac{26}{12} = 65
\]

### Step 3: Plug the values into the formula

\[
PMT = \frac{2500 \times 0.003846 \times (1 + 0.003846)^{65}}{(1 + 0.003846)^{65} - 1}
\]

Let's calculate this value.The fortnightly installment payment is approximately **K43.54**.

Would you like more details or have any questions? Here are some related questions you might find interesting:

1. How would the installment amount change if the interest rate increased to 12% per annum?
2. What if the loan term was shortened to 24 months—how would that affect the payments?
3. How much total interest would the buyer pay over the 30 months?
4. How would the payments differ if the buyer paid K1000 upfront instead of just the deposit?
5. What is the total cost of the refrigerator after all payments are made?
6. How would switching to monthly payments affect the installment amount?
7. What would be the impact of making an extra payment of K500 after one year?
8. How would the schedule change if the buyer missed one payment?

**Tip:** When taking out loans, always check the total interest you'll be paying over time!

Learn how to calculate fortnightly installments for a loan of K2500 at 10% annual interest over 30 months. Understand the formula for installment loans and the step-by-step calculation process. Suitable for advanced high school students and anyone interested in finance calculations.

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