without the specific interest rate (X), you can't calculate the precise present value or the exact interest. By assuming a 10% interest rate, each instalment includes approximately Rs. 1,348 of interest.
To calculate the interest included in each instalment, we need to follow these steps:
Calculate the total balance after the down payment: Cash price - Down payment = Balance (22,350 - 6,000) = Rs. 16,350
Divide the balance by the number of instalments: Balance / Number of instalments = Instalment size (16,350 / 3) = Rs. 5,450
Now, since the vendor charges interest, the instalments are not simply equal portions of the remaining balance. We need to determine the present value of each instalment to understand the actual interest charged.
Calculate the present value factor for an annual interest rate of X% for 3 years. This factor depends on the specific interest rate (X) not provided in the problem. Once you have the factor, multiply it by the instalment size to get the present value of each instalment.
Finally, subtract the present value from the instalment size to determine the interest included in each instalment. Instalment size - Present value = Interest per instalment .
Let's assume an interest rate of 10% for simplicity.
Balance after down payment: Rs. 16,350
Instalment size: Rs. 5,450
Present value factor for 3 years at 10% interest: 1 / (1 + 10/100)^3 ≈ 0.7513
Present value of each instalment: Rs. 5,450 * 0.7513 ≈ Rs. 4,102.21
Interest per instalment: Rs. 5,450 - Rs. 4,102.21 ≈ Rs. 1,347.79