Question

Frank paid Rs. $1000$ as monthly instalment for some months on buying a car from Skoda company, costing Rs. $25000$, after paying a down payment of Rs. $10000$. If Skoda company charged SI at $12\%$ p.a. find the number of instalments.

Answer 1

Let n be the number of months of repayment at Rs. $1000$ per month
Cost of car $=$ Rs. $25000$
Down payment $=$ Rs. $10000$
Loan amount $-$ Rs. $15000$
SI at $12\%$ p.a. on Rs. $15000$ for $n$ months
$=$ $15000\times \frac{12}{100}\times \frac{n}{12}=150n$
Total amount paid in n months $=1000n$
Thus $1000n=$ Rs. $15000+150n$
$\Rightarrow 850n=15000$
$\Rightarrow n=17.64$
The number of instalments is approximately $18$.