Question

Krishna Mohan buys a shop for Rs 15,00,000/-. He pays 10,00,000/- in advance and agrees to pay the balance in 10 annual installments of 50,000/- each. If rate of interest is 10% and he pays the installment with interest due on unpaid amount, find the total cost of the shop. ​

Answer 1

Step-by-step explanation:

Dear student

Amount paid cash by Krishna in cash =Rs 1000000balance amount to be paid in installment=Rs 1500000−1000000=Rs500000Amount of each installment = Rs 50000Amount of first installment== Rs 50000 + Interest paid on unpaid amount Rs 500000=Rs 50000+(10100×500000)=Rs 100000Amount of second installment= Rs 50000 + Interest on unpaid amount of Rs 450000=Rs 50000+(10100×450000)=Rs 95000Amount of third installment= Rs 50000 + Interest on unpaid amount of Rs 400000=Rs 50000+(10100×400000)=Rs 90000Rs 100000,  Rs 95000,  Rs 90000,..... forms an A.P.First term = Rs 100000Common difference = Rs 95000 – Rs 100000 = – Rs 5000Total cost of the shop= Rs 1000000 

Answer 2

Answer:

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