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a person buys a washing machine in the condition that he shall pay sum of INR 5880 at the cash down payment and the same sum at the end of the first year and two years. what is the total interest paid by him in this scheme, if the rate of interest is 5% compounded yearly?​

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fichoh

Answer: $827

Step-by-step explanation:

Given that :

Cash down payment = 5880

Payment at end of first year = 5880

Payment at end of second year = 5880

Interest rate = 5% = 0.05 compounded yearly

Let purchase amount = y

Amount left after cash down = amount on which interest is paid = y - 5880

Interest at end of first year :

(y - 5880) * 0.05 = 0.05y - 294

Amount to pay plus interest :

Amount left after cash down payment - amount paid at end of first year + interest

y - 5880 - 5880 + 0.05y - 294

y - 12054 + 0.05y

= 1.05y - 12054

2nd year interest :

(1.05y - 12054) * 0.05

= 0.0525y - 602.7

Amount left + interest = 2nd year payment

(1.05y - 12054) + (0.0525y - 602.7) = 5880

1.1025y - 12656.7 = 5880

1.1025y = 5880 + 12656.7

1.1025y = 18536.7

y = 18536.7 / 1.1025

y = 16813.33

Hence,

Sales price of washing machine = 16813.33

Total amount paid = (5880 + 5880 + 5880) = 17640

Interest paid = $(17640 - 16813.33) = $826.67

= $827

adioabiola

The total interest paid by him in this scheme, if the rate of interest is 5% compounded yearly is INR 826.67

Given:

Down payment = INR 5880

Payment at end of first year = INR 5880 (same as down payment)

Payment at end of second year = INR 5880 (same as down payment)

Interest rate = 5%

= 5/100

= 0.05 compounded yearly

Amount of purchase = x

Amount remaining after down payment

= x - 5880

Interest at end of first year :

(x - 5880) * 0.05(5,880)

= 0.05x - 294

Amount to pay plus interest = Amount remaining after down payment - amount paid at end of first year + interest

= x - 5880 - 5880 + 0.05x - 294

= x - 12,054 + 0.05x

= 1.05x - 12,054

2nd year interest :

(1.05x - 12054) * 0.05

= 0.0525x - 602.7

Amount left + interest = 2nd year payment

(1.05x - 12054) + (0.0525x - 602.7) = 5880

1.1025x - 12656.7 = 5880

1.1025x = 5880 + 12656.7

1.1025x = 18536.7

divide both sides by 1.1025

x = 18536.7 / 1.1025

x = 16,813.33

Therefore, The cost of washing machine b is INR 16,813.33

Total amount paid = (5880 + 5880 + 5880) = INR 17,640

Amount of Interest paid = (17640 - 16813.33)

= INR 826.67

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