Question

A person purchases a television
by paying Rs.20,000 in cash and
promising to pay Rs. 1000 at end of
every month for the next 2 years. If
money is worth 12% p. a., converted
monthly. find the cash price of the
television.​

Answer 1

Answer:

This may help you!!!

Step-by-step explanation:

The monthly payment=Rs. 1000 (c)

Duration 24 months (n)

The rate=12% per annum, or 1% per month

i=

100

r

=0.01

∴Present value=

i

c

[1−(1+i)

−n

]

=

0.01

1000

[1−(1.01)

−24

]

=

0.01

1000

[1−0.7884]

=

0.01

1000

×0.2116

=Rs. 21160

Initial down payment=Rs. 20,000

∴Total price=Rs. 41,160

Have a great day