Question

The cash price of a refrigerator is Rs 34 500. The hire purchase price is a deposit of Rs 6500 and 10 % simple interest on the outstanding balance, to be paid in 24 monthly installments. Calculate the amount of each monthly instalment

Answer 1

Rs 1400

Explanation:

You want the monthly installment payment if the balance of a Rs 34500 purchase after a 6500 deposit earns 10% simple interest and is paid in 24 months.

Outstanding

The outstanding balance is ...

Rs 34500 -6500 = Rs 28000

Interest

The interest on this balance for 24 months is ...

I = Prt

I = Rs 28000(0.10)(2) = Rs 5600

Monthly payment

The monthly payment will be 1/24 of the total due:

(28000 +5600)/24 = 1400

Each monthly installment will be Rs 1400.

<95141404393>