Question

The cost of a computer is 20,000. The company offers it in 36 months, but charges 10% interest. Find the monthly installment the purchaser has to pay.

Answer 1

Hint – In order to solve this problem we need to convert months into years then find the interest of the 3 years and get the monthly installment by dividing total amount to be paid by the total number of months.

Complete step-by-step answer:
Cost of a computer is 20,000.
Interest per year is 10%.
12 months is 1 year.
32 months = 3 years.
Interest for one year is $20,000 \times \dfrac{{10}}{{100}}$=2000.
The interest of 3 years will be 3 x 2000 = 6000.
Total amount to be paid is Actual rate + interest rate.
Total amount to be paid in 36 months is 20,000 + 6000 = 26,000.
The total money to be paid in 36 months is 26,000.
Then the amount paid in one month is $\dfrac{{26,000}}{{36}}$= 722.23.
Hence, monthly instalment is Rs. 722.23.
So, the answer is Rs. 722.23.

Note – In such problems always remember you just have to go through the question given that we just need to make the equations and solve them to get the right answer taking care of algebra. You have to do this in most of the problems you will get further.