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Question
Shamshad Ali buys a scooter for Rs 22000. He pays Rs 4000 cash and agrees to pay the balance in annual installment of Rs 1000 plus 10% interest on the unpaid amount. How much will the scooter cost him?
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Solution
price of scooter = 22000 Rs.
cash payment = 4000 Rs.
Unpaid amount = 22000 – 4000
= 18000 Rs.
amount of one installment = 1000 Rs.
∴ total installments = `18000/1000 = 18`
P Interest on principal at 10% per annum for one year = `("P" xx 10 xx 1)/100 = "P"/10`
After paying the installment, the remaining amount on which interest is to be charged for one year,
= 18000, 17000, 16000, ….., 1000
total interest amount
= `1/10 (18000 + 17000 + 16000 + ....... + "to 18 terms")`
= `1/10 xx 18/2 [2 xx 18000 - (18 - 1) xx 1000]`
= `9/10[36000 - 17000]`
= `(9 xx 19000)/10`
= 17100 Rs.
total installment amount = 18000 Rs.
cash = 4000 Rs.
Total payment = (18000 + 17000) + 4000 Rs.
= 39,100 Rs.
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