Question

1.     Calculate the cash price of the asset from the following
Rs. 6,000 paid at the time of agreement.
Rs. 7,200 paid at the end of I year.
Rs. 6,900 paid at the end of II year.
Rs. 6,600 paid at the end of III year.
Rs. 6,300 paid at the end of IV year.
Rate of interest 5% p.a.​

Answer 1

ANSWER :

• ❖ If Rs. 6,000 paid at the time of agreement; Rs. 7,200 paid at the end of I year; Rs. 6,900 paid at the end of II year; Rs. 6,600 paid at the end of III year; Rs. 6,300 paid at the end of IV year and Rate of interest 5% p.a.; then the cash price of the asset is Rs. 30000.

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SOLUTION :

❒ Given :-

• Amount paid at the time of agreement = Rs. 6,000

• Amount paid at the end of I year = Rs. 7,200

• Amount paid at the end of II year = Rs. 6,900

• Amount paid at the end of III year = Rs. 6,600

• Amount paid at the end of IV year = Rs. 6,300

• Rate of interest = 5% p.a.

❒ To Find :-

• Cash Price of the asset = ?

❒ Calculation :-

• ❍ Amount paid at the end of IV year = Rs. 6,300

Less : Interest Included 5% p.a. (5/105 × Rs. 6,000) = Rs. 300

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• ✎ Remaining Amount = Rs. 6,000

Add : Amount paid at the end of III year = Rs. 6,600

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• ✎ Total Amount = Rs. 12,600

Less : Interest Included 5% p.a. (5/105 × Rs. 12,600) = Rs. 600

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• ✎ Remaining Amount = Rs. 12,000

Add : Amount paid at the end of II year = Rs. 6,900

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• ✎ Total Amount = 18,900

Less : Interest Included 5% p.a. (5/105 × Rs. 18,900) = Rs. 900

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• ✎ Remaining Amount = Rs. 18,000

Add : Amount paid at the end of I year = Rs. 7,200

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• ✎ Total Amount = Rs. 25,200

Less : Interest Included 5% p.a. (5/105 × Rs. 25,200) = Rs. 1200

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• ✎ Remaining Amount = Rs. 24,000

Add : Amount paid at the time of agreement = Rs. 6,000

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• Cash Price of the Asset = Rs. 30,000 ★