A watch is available for Rs. 970 cash or Rs. 210 as cash down followed by three equal monthly ins

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22 Oct 2010 Find the monthly Installment

A watch is available for Rs. 970 cash or Rs. 210 as cash down followed by three equal
monthly installments. If the rate of interest is 16% per annum, find the monthly Installment

OPtion

1) 240
2) 190
3) 245
4) 250
5) 255
6) 300
7) 260
8) 195
9) 200
10) 265

Solution

The 3 installment are equal, thus
A = (P1)[1+(16/1200)]^1 = (P1)[1216/1200]^1
Implies that (P1) = [1200/1216]^1*A
A = (P2)[1+(16/1200)]^2= (P2)[1216/1200]^2
Implies that P2 = [1200/1216]2A
A = (P3)[1+(16/1200)]^3= (P3)[1216/1200]^3
Implies that (P3) = [1200/1216]^3*A
(P1) + (P2) + (P3) = [1200/1216]^1*A + [1200/1216]^2*A + [1200/1216]^3*A
760 = [1200/1216]^1*A + [1200/1216]^2*A + [1200/1216]^3*A
A = 760/ [1200/1216]^1 + [1200/1216]^2 + [1200/1216]^3
A = 260.12 ~ 260

Correct Option: 7 Best Solution (2)

Bimal   13 years AGO

A watch is available for Rs. 970 cash or Rs. 210 as cash down followed by three equal monthly instalments for Rs 760 and interest. Considering given options, 260 is closest instalment.

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Bawa   13 years AGO

Cash price of watch = Rs. 970
Cash down payment= Rs. 210
∴ Payment to be made in instalments = Rs. (970-210) = Rs 760
Let Rs. x be each instalment.

x-x*48/1200 +x-x*32/1200 + x-16*x/1200 =760

solving it, we get ,
x= 260.27 . hence option 7.

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