A person buys a washing machine on the condition that he shall pay a sum of INR 5880 as cash down payment and the same sum at the end of the first year and the two years. what is the total interest(in INR) paid by him under this scheme, if the rate of interest is 5% compounded yearly? (Nearest to a INR)?
a 842 b 784 c 792 d 827
Answers
Given :A person buys a washing machine on the condition that he shall pay a sum of INR 5880 as cash down payment and the same sum at the end of the first year and the two years.
the rate of interest is 5% compounded yearly
To Find :what is the total interest(in INR) paid by him under this scheme
Solution:
Let say Cost of washing Machine = 100C rs
Paid as down payment = 5880
Remaining Amount = 100C - 5880
Interest in 1st Year = (100C - 5880) * 5 * 1 /100 = 5C - 294
Amount left to be paid = 100C - 5880 - 5880 + 5C - 294
= 105C - 12054
Interest in 2nd year =( 105C - 12054) * 5 * 1 /100
Amount to be Paid
105C - 12054 + ( 105C - 12054) * 5 * 1 /100 = 5880
=> 105C - 12054 = 5600
=> C = 168.13
100C = 16813
Interest Paid = 3 * 5880 - 16813 = 826.67
= 827
the total interest(in INR) paid by him under this scheme, = 827
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