Surendra purchases a scooter for Rs 25000. He pays Rs. 5000 cash and agrees to pay the balance in annual installments of Rs. 2000 plus 10% interest on the unpaid amount. Find the total payment made for the scooter.

Asked by renukanancyqueen2015 | 20th Dec, 2015, 07:10: PM

Expert Answer:

C o s t space o f space t h e space s c o o t e r equals R s.25000 D o w n space p a y m e n t space i n space c a s h equals R s.5000 A m o u n t space u n p a i d equals 25000 minus 5000 equals R s.20000 A n n u a l space i n s t a l m e n t equals R s.2000 T h u s comma space t h e space n u m b e r space o f space i n s t a l m e n t equals 20000 over 2000 equals 10 I n t e r e s t space r a t e equals 10 percent sign I n t e r e s t space o n space u n p a i d space a m o u n t equals fraction numerator 20000 cross times 10 over denominator 100 end fraction equals 2000 I n t e r e s t space p e r space m o n t h equals 2000 over 10 equals R s.200 I n s t a l m e n t space p e r space m o n t h space w i t h space i n t e r e s t equals R s.2000 plus R s.200 equals R s.2200 S o comma space f o r space t e n space i n s t a l m e n t s equals 10 cross times R s.2200 equals R s.22000 T h u s space t h e space t o t a l space p a y m e n t space o f space t h e space s c o o t e r equals R s.5000 plus R s.22000 equals R s.27000  U s i n g space A P colon L e t space apostrophe a apostrophe space b e space t h e space i n i t i a l space t e r m space a n d space l e t space apostrophe d apostrophe space b e space t h e space c o m m o n space d i f f e r e n c e a equals i n i t i a l space p a y m e n t equals R s.5000 d equals 2200 n equals 1 plus n u m b e r space o f space i n s t a l m e n t s space open square brackets d o w n space p a y m e n t space i s space g i v e n space f i r s t space y e a r space a n d space i s t a l m e n t s space s t a r t space f r o m space t h e space s e c o n d space y e a r comma space t i l l space 11 t h space y e a r close square brackets therefore n equals 1 plus 10 equals 11 a subscript n equals a plus open parentheses 11 minus 1 close parentheses d space space space space equals 5000 plus 10 cross times 2200 equals 27500 T h e r e f o r e comma space t h e space t o t a l space p a y m e n t space f o r space t h e space s c o o t e r equals R s.27500

Answered by Vimala Ramamurthy | 21st Dec, 2015, 11:36: AM