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ExamsSSC CGL (Prelims)General

A laptop is available for ₹25,800 in cash or for ₹4,200 as a down payment and three equal annual instalments. If the seller charges interest at 12% per annum compounded annually, calculate the amount of each instalment.

  1. ₹ 8,993
  2. ₹ 9,150
  3. ₹ 9,452
  4. ₹ 9,720

Correct answer: ₹ 8,993

Solution

The financed amount is ₹25,800 - ₹4,200 = ₹21,600. Let each instalment be ₹x paid at the end of years 1, 2, and 3; its present value is \(\frac{x}{1.12}+\frac{x}{1.12^2}+\frac{x}{1.12^3}\). Equating this to ₹21,600 and solving gives \(x \approx ₹8,993\).

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