#### Question

A person bought a television set paying ` 20,000` in cash and promised to pay ` 1,000 at the end of every month for the next 2 years. If the money is worth 12% p.a. converted monthly, what is the cash price of the television set?

#### Solution

C = ` 1000, n = 2 years = 24 months

r = 12% per annum

= 1% per month

`i=r/100=1/100=0.01`

Present value `p=C/i[1-(1+i)^-24]`

=`1000/0.01[1+(1+0.001)^24]`

=`1000/0.01[1-0.7884]`

=`1000/0.01xx0.2116`

= Rs`21160`

Cash price of television=`20000+21160`

=Rs`41160`

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#### APPEARS IN

Solution A Person Bought a Television Set Paying 20 , 000 in Cash and Promised to Pay ` 1,000 at the End of Every Month for the Next 2 Years. If the Money is Worth 12% P.A. Converted Monthly, What is T Concept: Commission, Brokerage and Discount.