Question

A car is costing Rs. 80,000 was purchased by 10,000 down payment and remaining in 8 equal yearly installments by reducing balance method at 18% p.a. Find the equated yearly installments.

Answer 1

Answer:

equated yearly installments = Rs 17167

Step-by-step explanation:

A car is costing Rs. 80,000

Down payment = Rs 10000

Balance payment to be done = 80000 - 10000 = Rs 70000

P = Rs 70000

Interest Rate = 18% per annum

R = 18/100 = 0.18

n = 8

EYI = (P * R * (1 + R)ⁿ )/((1 + R)ⁿ  - 1)

EYI = 70000 * 0.18 * (1.18)⁸/((1.18)⁸ - 1)

EYI = 70000 * 0.18 * 3.759/2.759

EYI =  Rs 17167

equated yearly installments. = Rs 17167

Answer 2

Answer:

17167

Step-by-step explanation:

The final price of the car after down payment = 70,000

By reducing balance method;

No. of years(n)= 8, Rate(r) = 0.18,

EYI = (P * R * (1 + R)ⁿ )/((1 + R)ⁿ  - 1).

Here EYI Stands for Equated yearly Installments, when you put the value of P as 70,000, R as 0.18 and n as 8, you will get the required answer.