) KCS purchased a machine from JPS on hire purchase system, whose cash price was Rs.8,64,000. Rs.2,16,000 being paid on delivery and balance in three annual instalments of Rs.2,88,000 each. The amount of interest included in first installment would be
Answers
The amount of interest included in the first installment would be around INR 72,000 and remaining INR 216000 as machine payment.
Explanation:
Let us understand this problem in simple mathematical language.
Here the OP (original price) = INR 8,64,000
Payment on delivery = INR 2,16,000
Installment amount = INR 2,88,000
Total number of installments = 3
Amount paid as installment = 3 x INR 2,88,000 = INR 8,64,000.
So the amounts paid in three installments are equal to the Original price of the machine.
(as nothing about refund of delivery amount is mentioned so that is the extra amount paid, which includes interest).
So here we have 216000 of 864000 = ? %.
= 25%. (216000 /864000 x 100).
So a total of 25% interest was calculated for all three installments.
AS the amount for all three installments are same so 25% of (First installment) = INR 72000.
INR 72000 was paid in interest for each installment. And (288,000 – 72000 = INR 216,000 was paid for machine payment.
Explanation:
For calculating interest , take outstanding hire purchase price as a three years ratio.
Because, interest is calculated upon outstanding hire purchase price....
