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A purchased a mobile on hire purchase system. The cost price of the mobile was Rs 7,200. He agrees to pay four quarterly installments of Rs. 2,000 each. Calculate interest for each quarter?
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A purchased a mobile on hire purchase system. The cost price of the mo...
Understanding the Hire Purchase System
In a hire purchase system, a buyer makes an initial payment (or down payment) and pays off the remaining cost in installments over a specified period. Here, A purchased a mobile for Rs 7,200 and agreed to pay in four quarterly installments of Rs 2,000 each.
Cost Breakdown
- Total Cost of Mobile: Rs 7,200
- Number of Installments: 4
- Installment Amount: Rs 2,000
Total Amount Paid
- Total Payment over 4 Installments:
Rs 2,000 x 4 = Rs 8,000
Calculating Interest Paid
- Interest Paid:
Total Amount Paid - Cost Price
Rs 8,000 - Rs 7,200 = Rs 800
Interest per Quarter
- Since the total interest of Rs 800 is spread over 4 quarters:
Interest per Quarter = Total Interest / Number of Quarters
Rs 800 / 4 = Rs 200
Summary of Interest Calculation
- Each quarter, A pays an interest of:
Rs 200
- This interest is calculated on the reducing balance of the principal amount as installments are paid.
Conclusion
In this hire purchase agreement, A effectively pays Rs 200 in interest for each quarter, leading to a total interest payment of Rs 800 over the course of the agreement. Understanding these calculations helps in evaluating the cost of financing options like hire purchase systems.
In a hire purchase system, a buyer makes an initial payment (or down payment) and pays off the remaining cost in installments over a specified period. Here, A purchased a mobile for Rs 7,200 and agreed to pay in four quarterly installments of Rs 2,000 each.
Cost Breakdown
- Total Cost of Mobile: Rs 7,200
- Number of Installments: 4
- Installment Amount: Rs 2,000
Total Amount Paid
- Total Payment over 4 Installments:
Rs 2,000 x 4 = Rs 8,000
Calculating Interest Paid
- Interest Paid:
Total Amount Paid - Cost Price
Rs 8,000 - Rs 7,200 = Rs 800
Interest per Quarter
- Since the total interest of Rs 800 is spread over 4 quarters:
Interest per Quarter = Total Interest / Number of Quarters
Rs 800 / 4 = Rs 200
Summary of Interest Calculation
- Each quarter, A pays an interest of:
Rs 200
- This interest is calculated on the reducing balance of the principal amount as installments are paid.
Conclusion
In this hire purchase agreement, A effectively pays Rs 200 in interest for each quarter, leading to a total interest payment of Rs 800 over the course of the agreement. Understanding these calculations helps in evaluating the cost of financing options like hire purchase systems.
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A purchased a mobile on hire purchase system. The cost price of the mobile was Rs 7,200. He agrees to pay four quarterly installments of Rs. 2,000 each. Calculate interest for each quarter?
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A purchased a mobile on hire purchase system. The cost price of the mobile was Rs 7,200. He agrees to pay four quarterly installments of Rs. 2,000 each. Calculate interest for each quarter? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A purchased a mobile on hire purchase system. The cost price of the mobile was Rs 7,200. He agrees to pay four quarterly installments of Rs. 2,000 each. Calculate interest for each quarter? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A purchased a mobile on hire purchase system. The cost price of the mobile was Rs 7,200. He agrees to pay four quarterly installments of Rs. 2,000 each. Calculate interest for each quarter?.
A purchased a mobile on hire purchase system. The cost price of the mobile was Rs 7,200. He agrees to pay four quarterly installments of Rs. 2,000 each. Calculate interest for each quarter? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A purchased a mobile on hire purchase system. The cost price of the mobile was Rs 7,200. He agrees to pay four quarterly installments of Rs. 2,000 each. Calculate interest for each quarter? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A purchased a mobile on hire purchase system. The cost price of the mobile was Rs 7,200. He agrees to pay four quarterly installments of Rs. 2,000 each. Calculate interest for each quarter?.
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