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Shamshad Ali Buys a Scooter for Rs 22000. He Pays Rs 4000 Cash and Agrees to Pay the Balance in Annual Instalments of Rs 1000 Plus 10% Interest on the Unpaid Amount. How Much

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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 instalments of Rs 1000 plus 10% interest on the unpaid amount. How much the scooter will cost him.

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Solution

Cost of the scooter = Rs 22000
Shamshad Ali pays Rs 4000 in cash.
∴ Unpaid amount = Rs 22000

\[-\] Rs 4000 = Rs 18000

Number of years taken by Shamshed Ali to pay the whole amount = 18000

\[\div\] 1000 = 18
He agrees to pay the balance in annual instalments of Rs 1000 plus 10% interest on the unpaid amount.
Total amount of instalments:

10 % of Rs 18000 + 10 % of Rs 17000 + 10 % of Rs 16000

\[ = 1800 + 1700 + 1600 . . . . \]

It is in an A.P. where a = 1800, d = \[-\] 100 and n = 18.
Therefore, total amount of instalments:

\[\frac{18}{2}\left[ 2 \times 1800 + (18 - 1) \times - 100 \right]\]

\[ = 9\left[ 3600 - 1700 \right]\]

\[ = \text { Rs } 17100\]

∴ Total amount Shamshad Ali has to pay = Rs (22000 + 17100) = Rs 39100

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