Question

The cost price of a washing machine is $18,940$. The table given below illustrates various schemes to purchase the washing machine through installments. Choose the best scheme to purchase.

Sl. No.	Different schemes	S.P. in	Initial payments	Rate of interest	Processing fee	Period
(i)	$75$% Finance	$18,940$	$25$%	$12$%	$1$%	$24$ months
(ii)	$100$% Finance	$18,940$	Nil	$16$%	$2$%	$24$ months
(iii)	$0$% Finance	$18,940$	$4$ E.M.I. in advance	Nil	$2$%	$24$ months

Calculate the E.M.I. and the total amount for the above schemes.

Answer 1

(i) $75$% Finance
$P=$ $18,940$, Initial payment $=25$%, Rate $=12$%, Processing fee $=1$%
Processing fee $=1$% of $18,940$
$=\frac{1}{100}\times 18940=$ $189.40\simeq$ $189$
Initial payment $=25$% of $18,940$
$=\frac{25}{100}\times 18940=$ $4,735$
Loan amount $=18,940-4,735=$ $14,205$
Interest $=\frac{14205\times 12\times 2}{100}$
$=$ $3,409.20\simeq$ $3,409$
E.M.I. $=\frac{Loanamount+Interest}{Numberofmonths}$
$=\frac{14205+3409}{24}=\frac{17614}{24}$
$=$ $733.92\simeq$ $734$
$\therefore$ Total amount to be paid $=4,735+14,205+3,409+189$
$=$ $22,538$
(ii) $100$% finance
Processing fee $=2$% of $18,940$
$=\frac{2}{100}\times 18940=$ $378.80\simeq$ $379$
Rate of Interest $=16$%
Interest $=18940\times \frac{16}{100}\times 2$
$=$ $6060.80\simeq$ $6,061$
E.M.I. $=\frac{Loanamount+Interest}{Numberofmonths}$
$=\frac{18940+6061}{24}=\frac{25001}{24}$
$=$ $1,041.708\simeq$ $1,041.71$
$=$ $1,042$
Total amount to be paid $=6,061+18,940+379=$ $25,380$
(iii) $0$% interest scheme
Processing fee $=2$% of $18,940$
$=\frac{2}{100}\times 18940=$ $378.80\simeq$ $379$
E.M.I. $=\frac{Loanamount+Interest}{Numberofmonths}$
$=\frac{18940+0}{24}=\frac{18940}{24}$
$=$ $789.166\simeq$ $789$
Total amount to be paid $=18,940+3,156+379=$ $22,475$
Advance E.M.I. paid $=$ $789\times 4=$ $3,156$
Hence, $0$% interest scheme is the best scheme.