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B purchase tv on hire purchase system. The cash price of the tv was 7200. He agrees to pay four quarterly instalment of rs.2000 each.Calculate interest for each quarter?
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B purchase tv on hire purchase system. The cash price of the tv was 72...
Calculation of Interest on Hire Purchase System
Calculation of the Total Amount Payable
- Cash price of the TV: Rs. 7200
- Number of instalments: 4
- Instalment amount: Rs. 2000
- Total amount payable: (Instalment amount x Number of instalments) = (Rs. 2000 x 4) = Rs. 8000
Calculation of Interest
- Interest charged on hire purchase system is usually calculated on the unpaid balance of the cash price.
- Unpaid balance after the first instalment: Rs. 7200 - Rs. 2000 = Rs. 5200
- Interest charged on the unpaid balance is calculated for the first quarter: (Unpaid balance x Interest rate x Time)/100
- Assuming an interest rate of 10%, interest for the first quarter would be: (Rs. 5200 x 10 x 3)/400 = Rs. 130
- Unpaid balance after the second instalment: Rs. 5200 - Rs. 2000 = Rs. 3200
- Interest charged on the unpaid balance is calculated for the second quarter: (Unpaid balance x Interest rate x Time)/100
- Interest for the second quarter would be: (Rs. 3200 x 10 x 3)/400 = Rs. 96
- Unpaid balance after the third instalment: Rs. 3200 - Rs. 2000 = Rs. 1200
- Interest charged on the unpaid balance is calculated for the third quarter: (Unpaid balance x Interest rate x Time)/100
- Interest for the third quarter would be: (Rs. 1200 x 10 x 3)/400 = Rs. 36
- Unpaid balance after the fourth instalment: Rs. 1200 - Rs. 2000 = Rs. -800 (Overpaid)
- No interest is charged on the overpaid amount.
Explanation of Interest Calculation
- Hire purchase system is a system of buying goods on credit where the buyer pays an initial deposit and the remaining amount is paid in instalments over a period of time.
- The instalments paid by the buyer include both the principal amount and the interest charged on the unpaid balance.
- The interest charged on the unpaid balance is usually calculated on a quarterly basis.
- The interest rate charged on hire purchase system varies depending on the seller and the product being sold.
- In this case, assuming an interest rate of 10%, interest for each quarter is calculated using the formula: (Unpaid balance x Interest rate x Time)/100
- The unpaid balance after each instalment is calculated by subtracting the instalment amount from the cash price of the TV.
- No interest is charged on the overpaid amount, which occurs when the sum of the instalments paid is greater than the cash price of the TV.
Calculation of the Total Amount Payable
- Cash price of the TV: Rs. 7200
- Number of instalments: 4
- Instalment amount: Rs. 2000
- Total amount payable: (Instalment amount x Number of instalments) = (Rs. 2000 x 4) = Rs. 8000
Calculation of Interest
- Interest charged on hire purchase system is usually calculated on the unpaid balance of the cash price.
- Unpaid balance after the first instalment: Rs. 7200 - Rs. 2000 = Rs. 5200
- Interest charged on the unpaid balance is calculated for the first quarter: (Unpaid balance x Interest rate x Time)/100
- Assuming an interest rate of 10%, interest for the first quarter would be: (Rs. 5200 x 10 x 3)/400 = Rs. 130
- Unpaid balance after the second instalment: Rs. 5200 - Rs. 2000 = Rs. 3200
- Interest charged on the unpaid balance is calculated for the second quarter: (Unpaid balance x Interest rate x Time)/100
- Interest for the second quarter would be: (Rs. 3200 x 10 x 3)/400 = Rs. 96
- Unpaid balance after the third instalment: Rs. 3200 - Rs. 2000 = Rs. 1200
- Interest charged on the unpaid balance is calculated for the third quarter: (Unpaid balance x Interest rate x Time)/100
- Interest for the third quarter would be: (Rs. 1200 x 10 x 3)/400 = Rs. 36
- Unpaid balance after the fourth instalment: Rs. 1200 - Rs. 2000 = Rs. -800 (Overpaid)
- No interest is charged on the overpaid amount.
Explanation of Interest Calculation
- Hire purchase system is a system of buying goods on credit where the buyer pays an initial deposit and the remaining amount is paid in instalments over a period of time.
- The instalments paid by the buyer include both the principal amount and the interest charged on the unpaid balance.
- The interest charged on the unpaid balance is usually calculated on a quarterly basis.
- The interest rate charged on hire purchase system varies depending on the seller and the product being sold.
- In this case, assuming an interest rate of 10%, interest for each quarter is calculated using the formula: (Unpaid balance x Interest rate x Time)/100
- The unpaid balance after each instalment is calculated by subtracting the instalment amount from the cash price of the TV.
- No interest is charged on the overpaid amount, which occurs when the sum of the instalments paid is greater than the cash price of the TV.
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B purchase tv on hire purchase system. The cash price of the tv was 72...
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B purchase tv on hire purchase system. The cash price of the tv was 7200. He agrees to pay four quarterly instalment of rs.2000 each.Calculate interest for each quarter?
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B purchase tv on hire purchase system. The cash price of the tv was 7200. He agrees to pay four quarterly instalment of rs.2000 each.Calculate interest for each quarter? 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 B purchase tv on hire purchase system. The cash price of the tv was 7200. He agrees to pay four quarterly instalment of rs.2000 each.Calculate interest for each quarter? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for B purchase tv on hire purchase system. The cash price of the tv was 7200. He agrees to pay four quarterly instalment of rs.2000 each.Calculate interest for each quarter?.
B purchase tv on hire purchase system. The cash price of the tv was 7200. He agrees to pay four quarterly instalment of rs.2000 each.Calculate interest for each quarter? 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 B purchase tv on hire purchase system. The cash price of the tv was 7200. He agrees to pay four quarterly instalment of rs.2000 each.Calculate interest for each quarter? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for B purchase tv on hire purchase system. The cash price of the tv was 7200. He agrees to pay four quarterly instalment of rs.2000 each.Calculate interest for each quarter?.
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