Question

when total cash price and installments are given, but rate of interest is not given :
what is the procedure of calculation of total interest and interest on each installment .solve the given questions.
1)cash price of a machine is rs 1900.payment is to be made in 3 equal installment of rs 800 each.

Answer 1

Answer:

Total interest = ₹501

Interest per installment = ₹167

Rate of interest = 26.37% (approx)

Explanation:

Price of machinery = ₹1,900

Payment to be made in 3 equal installments.

So, Principal per installment

= ₹1,900/3

= ₹633

Payment on each installment = ₹800

Interest paid each installment = (₹800-₹633) = ₹167

Total interest paid = ₹167 × 3times

= ₹501

Rate of interest = ₹501/₹1900 × 100

= 26.37% (approx)

Answer 2

Total interest = ₹500

interest on each will be Rs 166

rate of interest = 26.31%

here,

principle amount = ₹1900

the sum of all payments made will be 800*3 = ₹2400

the amount of interest= 2400-1900

                                    = 500

rate of interest = interest/principal amount * 100

                         = 500/1900*100

                          = 26.31%

amount of interest on each payment = 500/3

                                                              = ₹166.