Question

Rajni sharma buys a new car for rs 350000. She pays rupees 110000 in cash and 2,40,000 is to be paid as installment in 12 monthly installments of 20,000 each . if the rate of interest is 5/4 % per month and she has to pay the interest on the unpaid balance amount every month with the installment due , find the total cost of the car.

Answer 1

Given :

The cost of car = Rs 350000

The amount paid in cash = Rs 110000

Rest amount = Rs 350000 - Rs 110000

                      = Rs 240000

installment period = 12 months = 1 year

The rate of interest = $\dfrac{5}{4}$ % = 1.25 %

To Find :

The total cost of the car.

Solution :

∵  The interest on the unpaid balance amount every month with the installment

From Compound Interest

Amount = Principal × $(1+\dfrac{rate}{12 \times 100}) ^{12 \times time}$

              = 240000 × $(1+\dfrac{1.25}{12 \times 100}) ^{12 \times 12}$

              = 240000 × $(1.00104)^{144}$

              = 240000 × 1.1614

              = Rs 278736

∵ The amount paid in cash = Rs 110000

∴ The total cost of the car = amount paid in cash + amount received in finance

                                            =  Rs 110000 + Rs 278736

                                            = Rs 388,736

Hence, The total cost of the car is  Rs 388,736 . Answer