A farmer buys a used tractor for Rs.12000.He pays RS 6000 cash and agrees to pay the balance in annual installments of Rs 1000 plus 10% interest on the unpaid amount.How much the scooter cost him?

Asked by Mohammed Sameer | 1st Nov, 2013, 08:45: PM

Expert Answer:

Total cost of tractor = Rs. 12000
Paid Cash = Rs. 6000
Balance = Rs. (12000 - 6000) = Rs 6000
Number of installments @ Rs. 1000 each = 6
 
Interest on 1st installment
Hence, 1st installment = Rs (1000+600) = Rs 1600
 
Interest on 2nd installment
Hence, 2nd installment = Rs (1000+500) = Rs 1500
 
Interest on 3rd installment
Hence, 3rd installment = Rs (1000+400) = Rs 1400 and so on.
 
Total amount paid in installments = Rs (1600 + 1500 + 1400 +....... 6 terms)
Here, a = 1600, d = -100 and n = 6
 
Thus, Amount paid by farmer = Rs (6000 + 8100) = Rs. 14,100

Answered by Rashmi Khot | 5th Nov, 2013, 12:14: PM

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