[Solved] Installments MCQ [Free PDF] - Objective Question Answer for Installments Quiz - Download Now! (2024)

Given:

A car is available for ₹4,98,200 cash or ₹60,000 cash down payment followed by three equal annual instalments.

If the rate of interest charged is 16% p.a., compounded yearly.

Formula used:

D =\(\frac{A}{R} × (1 - \frac{1}{(1+R)^n})\)

Where,

D, is the amount due (oramount on which interest is to be applied)

A, is the value of the instalment

R, is the rate of interest applied

n, is the number of instalments

Calculation:

The price of the car=₹4,98,200

The down payment is done for buyingcar=₹60,000

The remaining amount (which is paid in three equal instalments) =₹4,98,200 -₹60,000=₹4,38,200

The rate of interest applied annually = 16% p.a.

The number of instalments, n = 3

Now,

By substituting the value of the respective variable in the required formula, we get,

⇒₹4,38,200 =\(\frac{A}{16\text{%}} × (1 - \frac{1}{(1+\text{16%})^3})\)

⇒₹4,38,200× 16% = A×\((1 - \frac{100^3}{116^3})\)

⇒₹4,38,200× \(\frac{16}{100}\)= A×\((1 - \frac{100^3}{116^3})\)

⇒₹4,382× 16= A×\((1 - \frac{25^3}{29^3})\)

⇒₹4,382× 16= A×\((\frac{24389-15625}{24389})\)

⇒₹4,382× 16= A×\((\frac{8764}{24389})\)

⇒₹8= A×\((\frac{1}{24389})\)

⇒ A =₹1,95,112

The total amount paid in three instalments =₹1,95,112× 3 =₹5,85,336

The interest paid =₹5,85,336 -₹4,38,200 =₹1,47,136

∴₹1,47,136 is theinterest charged in the instalment scheme.