Question

A hire purchase company charges $5\%$ SI per annum on goods sold under instalment scheme. An article priced Rs. $12000$ was hire purchased with a down payment of Rs. $3000$. If the company allows only $12$ monthly instalments for repayment, find the monthly instalment amount to be paid.

Answer 1

Cost price of the article $=$ Rs. $12000$
Cash down payment $=$ Rs. $3000$
Balance money given as loan $=12000-3000=9000$
Total interest at $5\%$ for $12$ months $=$ $9000\times 1\frac{5}{100}=450$
Total amount to be repaid $=$ Rs. $9000+450=$ Rs. $9450$
Instalment amount $=$ $\frac{9450}{12}=787.50$