Question

A man buys an iPhone $6$ for Rs. $\mathrm{53,000}$. He realizes that he cannot pay such a large amount of money right now, so he decides to pay Rs. $\mathrm{4,505}$ monthly for $12$ months. This amount of Rs. $\mathrm{4,505}$ is called as:

• A. Simple Interest
• B. Selling Price
• C. Principal Amount
• D. Instalment

Answer 1

The correct option is D Instalment

$\Rightarrow$ A man buys an iPhone $6$ for $Rs.53,000.$ He realize the he cannot pay such a large amount of money right now, so he decides to pay $Rs.4,505$ monthly for $12$ months. This amount of $Rs.4,505$ is called as : $Installment.$

$\Rightarrow$ The monthly or period payment in installment purchase is termed as installment.

$\Rightarrow$ In the case of installment purchase, the purchase happens as soon as the agreement between the buyer and financing Difference between Hire Purchase vs. Installment Purchase company is entered into.

$\Rightarrow$ In installment purchase, purchase and ownership take place before the complete payment.