A bicycle is sold by a shopkeeper for Rs. 19,200 cash or for Rs. 4,800 cash down payment together with five equal monthly instalments. If the rate of interest charged by the shopkeeper is 12% per annum find each instalment. [Enter the nearest possible integer as your answer in Rs.]
Explanation:
Using the formula for installments for SI:
P1+R×T10 = x1+R×(T-1)10 + x1+R×(T-2)10 + ⋯ + x
Where, P = amount lent x = equal installment, R = interest rate and T = total duration of loan.
⇒14,4001+1×510 = x1+1×410 + x1+1×310 + x1+1×210 + 1+1×110 + x
⇒ 14,4001+510 = x5+1×(4+3+2+1)100
⇒ 14,4002120 = x5+110
⇒ x ≈ 2965
Hence, 2965.
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