Multiple choice

The price of a TV set worth Rs.20,000 is to be paid in 20 installments of Rs.1,000 each. If the rate of interest is 6% per annum and the first installment has to be paid at the time of purchase, what will be the value of the last installment covering the interest?

  1. Rs.3,000

  2. Rs.2,050

  3. Rs.1,050

  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 at the time of purchase, leaving a principal balance of Rs. 19000. This remaining balance is paid in 19 monthly installments of Rs. 1000, and the simple interest at 6% per annum is charged on the reducing balance, which equals 19000 multiplied by 0.06 multiplied by the sum of the first 19 integers divided by the square of 20. This total interest divided by 20 gives an interest component added to each of the remaining 19 installments. Because the standard formula for such reducing balance EMI interest calculations does not match any of the provided options, the correct choice is None of these.

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