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Tulasiram

· started a discussion

· 1 Months ago

installments (Question: 214597.0 )

i didn't understand

Question:

If the installments are paid at the end of every year, what annual payment will discharge a debt of Rs. 7,200 due in 3 years at 20% per annum simple interest?

Options:
A) Rs. 1500
B) Rs.  1800
C) Rs. 2000
D) Rs. 2250
Solution:
Ans: (c)


Knowledge Expert

· commented

· 1 Months ago

Dear Student,

Suppose you have to buy a car at Rs. 200000. You can pay the seller in two ways: Either you can pay the entire amount in one go i.e. you’ll pay Rs. 200000 and take the car.
But what if you don’t have enough money at the time of purchase?
The other option is that you pay some down-payment and give the remaining amount in the form of equal installments at regular intervals.
Note: In installment scheme the buyer pays more because in addition to installment a buyer has to pay an interest on it monthly or yearly.

Just apply the formula given to solve this problem.

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