A doctor is planning to purchase an X-ray machine for his hospital. He has two options, either to make a cash payment of Rs. 500,000 or pay Rs. 615,000 in six installments.


If the doctor chooses to make a cash payment of Rs. 500,000, he will have to pay the entire amount upfront. This option has the advantage of avoiding interest payments, and the doctor will own the X-ray machine outright.


If the doctor chooses to pay in installments, he will have to pay Rs. 615,000 in six installments. The advantage of this option is that the doctor will not have to pay the full amount upfront, which can be beneficial for managing cash flow. However, this option comes with the disadvantage of having to pay interest on the outstanding balance.


If the doctor chooses to pay in installments, he will have to pay interest on the outstanding balance. The interest rate will depend on the terms of the installment plan. For example, if the installment plan has an interest rate of 10%, the doctor will have to pay an additional Rs. 61,500 in interest over the course of six installments.


In conclusion, the doctor has two options for purchasing the X-ray machine for his hospital. He can either make a cash payment of Rs. 500,000 or pay Rs. 615,000 in six installments. The choice will depend on the doctor's financial situation and preferences. If the doctor has enough cash on hand and wants to avoid paying interest, he should choose the cash payment option. However, if the doctor wants to manage his cash flow and is comfortable paying interest, he can choose the installment payment option.

615000/6×4.1111