Chapter 6: Instalments

Example 7. A computer is available for Rs. 39,300 cash or for Rs. 12,820 cash down payment and three equal half yearly instalments. If the dealer charges interest at the rate of 20% per annum compounded annually calculate each instalment.

Solution:- Let P₁ + P₂ + P₃ = 39300 - 12820

= 26480

r = 20% p.a.compounded annually

= 10% half yearly

Let each instalment be x

Similarly, and

P₁ + P₂ + P₃ = 26480

each instalment = Rs. 10648