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Question
Shamshad Ali buys a scooter for Rs 22000. He pays Rs 4000 cash and agrees to pay the balance in annual instalments of Rs 1000 plus 10% interest on the unpaid amount. How much the scooter will cost him.
Solution
Cost of the scooter = Rs 22000
Shamshad Ali pays Rs 4000 in cash.
∴ Unpaid amount = Rs 22000
\[-\] Rs 4000 = Rs 18000
Number of years taken by Shamshed Ali to pay the whole amount = 18000
\[\div\] 1000 = 18
He agrees to pay the balance in annual instalments of Rs 1000 plus 10% interest on the unpaid amount.
Total amount of instalments:
10 % of Rs 18000 + 10 % of Rs 17000 + 10 % of Rs 16000
\[ = 1800 + 1700 + 1600 . . . . \]
It is in an A.P. where a = 1800, d = \[-\] 100 and n = 18.
Therefore, total amount of instalments:
\[\frac{18}{2}\left[ 2 \times 1800 + (18 - 1) \times - 100 \right]\]
\[ = 9\left[ 3600 - 1700 \right]\]
\[ = \text { Rs } 17100\]
∴ Total amount Shamshad Ali has to pay = Rs (22000 + 17100) = Rs 39100
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