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X purchase a car on hire_purchase system on 01.01.2018 .The total cash price of the car is 450000, payable 90000 down and three installment of 170000 150000 and 108460 payable at the end of first ,second third year respectively.interest is charged at 10 pa
You are required to calculate interest paid by the buyer to the seller each year?
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X purchase a car on hire_purchase system on 01.01.2018 .The total cash...
Introduction
To calculate the interest paid by the buyer (X) each year on a hire purchase system, we need to examine the total cash price, down payment, and the installment payments. The interest is charged at a rate of 10% per annum.
Details of the Purchase
- Total Cash Price: ₹450,000
- Down Payment: ₹90,000
- Installments:
- Year 1: ₹170,000
- Year 2: ₹150,000
- Year 3: ₹108,460
- Interest Rate: 10% per annum
Calculation of Interest Each Year
1. Year 1:
- Remaining Balance After Down Payment: ₹450,000 - ₹90,000 = ₹360,000
- Interest for Year 1: ₹360,000 × 10% = ₹36,000
- Total Amount Paid End of Year 1: ₹170,000
- Outstanding Balance After Payment: ₹360,000 + ₹36,000 - ₹170,000 = ₹226,000
2. Year 2:
- Interest for Year 2: ₹226,000 × 10% = ₹22,600
- Total Amount Paid End of Year 2: ₹150,000
- Outstanding Balance After Payment: ₹226,000 + ₹22,600 - ₹150,000 = ₹98,600
3. Year 3:
- Interest for Year 3: ₹98,600 × 10% = ₹9,860
- Total Amount Paid End of Year 3: ₹108,460
- Outstanding Balance After Payment: ₹98,600 + ₹9,860 - ₹108,460 = ₹0
Summary of Interest Paid Each Year
- Year 1 Interest: ₹36,000
- Year 2 Interest: ₹22,600
- Year 3 Interest: ₹9,860
This detailed breakdown outlines the interest paid by X to the seller each year during the hire purchase of the car.
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X purchase a car on hire_purchase system on 01.01.2018 .The total cash price of the car is 450000, payable 90000 down and three installment of 170000 150000 and 108460 payable at the end of first ,second third year respectively.interest is charged at 10 pa You are required to calculate interest paid by the buyer to the seller each year?
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