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National trading Company bought A motet van from honda company on hire purchase system over term of 2 year starting from 1st April 2016. The cash price of the mother van was 29740 and that payment was to be made as follows 2740 on signing of the agreement and the balance in 4 half yesrly instalment of 7500 each. Tha honda company changes intrest at the rate of 8% p.a. working on yearly rest. Calculate the intrest included in each instalment?
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National trading Company bought A motet van from honda company on hire...
Calculation of Interest included in each installment for National Trading Company's Motet Van
Given Information:
- Cash price of the Motet Van = $29,740
- Payment made at the time of signing the agreement = $2,740
- Balance payment to be made in 4 half-yearly installments of $7,500 each
- Hire purchase system term = 2 years
- Interest rate charged by Honda Company = 8% p.a. (compounded annually)
Calculation:
Step 1: Total Interest Charged by Honda Company
The total interest charged by the Honda Company can be calculated as follows:
Interest rate charged by Honda Company = 8% p.a. (compounded annually)
Hire purchase term = 2 years
Therefore, the total interest charged by the Honda Company can be calculated as follows:
Total Interest = P * r * t
Where,
P = Principal amount = Cash price of the Motet Van - Payment made at the time of signing the agreement = $29,740 - $2,740 = $27,000
r = Rate of interest per annum = 8%
t = Time period = 2 years
Total Interest = $27,000 * 8% * 2 = $4,320
Therefore, the total interest charged by the Honda Company is $4,320.
Step 2: Interest included in each installment
The interest included in each installment can be calculated as follows:
Total Interest = $4,320
Number of Installments = 4
Therefore, the interest included in each installment can be calculated as follows:
Interest included in each installment = Total Interest / Number of Installments
= $4,320 / 4
= $1,080
Therefore, the interest included in each installment is $1,080.
Explanation:
The National Trading Company bought a Motet Van from the Honda Company on a hire purchase system over a term of 2 years starting from 1st April 2016. The cash price of the Motet Van was $29,740, and the payment was to be made as follows: $2,740 on signing the agreement, and the balance in 4 half-yearly installments of $7,500 each. The Honda Company charged interest at the rate of 8% p.a. working on a yearly rest.
To calculate the interest included in each installment, we first calculated the total interest charged by the Honda Company. We did this by using the formula Total Interest = P * r * t, where P is the principal amount, r is the rate of interest per annum, and t is the time period. We subtracted the payment made at the time of signing the agreement from the cash price of the Motet Van to find the principal amount. We then multiplied the principal amount, rate of interest, and time period to get the total interest charged by the Honda Company. We found that the total interest charged by the Honda Company was $4,320.
To find the interest included in each installment, we divided the total interest by the number of installments. We found that the interest included in each installment was $1,080.
Therefore, the National Trading Company will have to pay an interest of $1,080
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National trading Company bought A motet van from honda company on hire purchase system over term of 2 year starting from 1st April 2016. The cash price of the mother van was 29740 and that payment was to be made as follows 2740 on signing of the agreement and the balance in 4 half yesrly instalment of 7500 each. Tha honda company changes intrest at the rate of 8% p.a. working on yearly rest. Calculate the intrest included in each instalment?
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National trading Company bought A motet van from honda company on hire purchase system over term of 2 year starting from 1st April 2016. The cash price of the mother van was 29740 and that payment was to be made as follows 2740 on signing of the agreement and the balance in 4 half yesrly instalment of 7500 each. Tha honda company changes intrest at the rate of 8% p.a. working on yearly rest. Calculate the intrest included in each instalment? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about National trading Company bought A motet van from honda company on hire purchase system over term of 2 year starting from 1st April 2016. The cash price of the mother van was 29740 and that payment was to be made as follows 2740 on signing of the agreement and the balance in 4 half yesrly instalment of 7500 each. Tha honda company changes intrest at the rate of 8% p.a. working on yearly rest. Calculate the intrest included in each instalment? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for National trading Company bought A motet van from honda company on hire purchase system over term of 2 year starting from 1st April 2016. The cash price of the mother van was 29740 and that payment was to be made as follows 2740 on signing of the agreement and the balance in 4 half yesrly instalment of 7500 each. Tha honda company changes intrest at the rate of 8% p.a. working on yearly rest. Calculate the intrest included in each instalment?.
National trading Company bought A motet van from honda company on hire purchase system over term of 2 year starting from 1st April 2016. The cash price of the mother van was 29740 and that payment was to be made as follows 2740 on signing of the agreement and the balance in 4 half yesrly instalment of 7500 each. Tha honda company changes intrest at the rate of 8% p.a. working on yearly rest. Calculate the intrest included in each instalment? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about National trading Company bought A motet van from honda company on hire purchase system over term of 2 year starting from 1st April 2016. The cash price of the mother van was 29740 and that payment was to be made as follows 2740 on signing of the agreement and the balance in 4 half yesrly instalment of 7500 each. Tha honda company changes intrest at the rate of 8% p.a. working on yearly rest. Calculate the intrest included in each instalment? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for National trading Company bought A motet van from honda company on hire purchase system over term of 2 year starting from 1st April 2016. The cash price of the mother van was 29740 and that payment was to be made as follows 2740 on signing of the agreement and the balance in 4 half yesrly instalment of 7500 each. Tha honda company changes intrest at the rate of 8% p.a. working on yearly rest. Calculate the intrest included in each instalment?.
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