Multiple choice

The price of a T.V. set worth Rs. 20,000 is to be paid in 20 installments of Rs. 1000 each. If the rate of interest be 6% per annum, and the first installment be paid at the time of purchase, then the value of the last installment covering the interest as well will be

  1. Rs. 1050

  2. Rs. 2050

  3. Rs. 3000

  4. None of these
Reveal answer Fill a bubble to check yourself
D Correct answer
AI explanation

The first installment of Rs. 1000 is paid immediately, leaving a remaining balance of Rs. 19000 to be paid in 19 subsequent installments. The last installment is paid 19 years after the purchase, so its present value is the Rs. 1000 principal plus the simple interest on Rs. 1000 for 19 years at 6%. The interest is calculated as 1000 multiplied by 19 multiplied by 6 divided by 100, which is Rs. 1140, making the total value of the last installment Rs. 2140; therefore, none of the provided options are correct.

Keep practicing — related questions