Question

A bought a TV for Rs.20000 with Rs.5000 is a down payment followed by four monthly equal installments. The rate of interest for simple interest is 15% per annum. Find the approximate monthly installment.

1. 3980
2. 3475
3. 3865
4. 2678

Answer 1

Correct Answer - Option 3 : 3865

Calculation:

Amount to be paid after down payment = 20000 - 5000 = Rs.15000

Amount to be paid with interest in installments = 15000 × 15/100 × 4/12 + 15000 = Rs.15750

Let each installment be Rs.m.

⇒ 15750 = m + m + m × 15/100 × 1/12 + m + m × 15/100 × 2/12 + m + m × 15/100 × 3/12

⇒ 15750 = 4.075m

⇒ m = 3865.03 ≈ 3865

∴ Each installment would be of Rs.3865.

Let P be the principle sum and a be the equal monthly installment for simple interest.

P + PNR/1200 = a + a × (N - 1) × R/1200 + a + a × (N - 2) × R/1200 + .......+ a