a machine is purchased on installment basis such that rs 5000 one to be paid on signing to contract and the balance in 4 equal annual installments of rs 3000 each.if interest is charged at 5% per annum. find the cash down price of the machine
Answers
Given : a machine is purchased on installment basis such that rs 5000 one to be paid on signing to contract and the balance in 4 equal annual installments of rs 3000 each
interest is charged at 5% per annum.
To Find : the cash down price of the machine
Solution:
Cash Down Price = 5000 + Amount Loaned
Amount Loaned = P
Equated Annual Installments = 3000
Number of installments = 4
R = 5 %
EMI Formula = [P x (R/100) x (1+(R/100)ⁿ]/[(1+(R/100)ⁿ-1]
=> 3000 =[P x (5/100) x (1+(5/100)⁴]/[(1+(5/100)⁴-1]
=> 3000 = [P x (1/20) x (21/20)⁴]/[(21/20)⁴-1]
=> 60000 = P * 21⁴/ (21⁴ - 20⁴)
=> P = 10,637.9
Cash Down Price = 5000 + 10,637.9
= 15,637.9
= 15638 Rs
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