Question

Mr X arranges to pay off a Debt of #9600 in 48 annual instalments which form an AP, when 40 of these instalments are paid, Mr X become insolvent,and he still owe his creditor #2400 find the value of each of the first three instalmentsof Mr X?​

Answer 1

The first 3 installments of Mr. X were $ 180.

Explanation:

Since Mr X arranges to pay off a Debt of $ 9600 in 48 annual installments which form an AP, and when 40 of these installments are paid, Mr X become insolvent, and he still owe his creditor $ 2400, to find the value of each of the first three installments of Mr X the following calculation must be performed:

((9,600 - 2,400) / 40) = X

7,200 / 40 = X

180 = X

Therefore, the first 3 installments of Mr. X were $ 180.