Problems Based on Instalment

Introduction
1. Instalment Purchase Schemes: To increase their
sales, different business organisations offer different
schemes to the buyers to enable them to buy costly articles
even i f their income is very low. One such scheme is the
usialment scheme. The cost o f the article bought is paid in
stalments.
2. In instalment scheme the buyer has to pay more
aecause in addition to the selling price, the buyer has to pay
interest also on it.
3. Cash Price: The amount for which the article can
x purchased on full payment is called cash price.
4. Cash Down Payment: While purchasing an article
mier instalment scheme, some payment has to be made inimSh. It is called cash down payment. The remaining amount
B paid in equal monthly, quarterly or annual instalements as
av be decided at the time of purchase.
Case-I: Based on Simple Interest
When the period over which the instalment scheme
s operative is less than a year. The payment is made in a
specified number of equal monthly instalments. Naturally we
calculate the simple interest in such cases.
T\e I: Monthly instalment being given, to find the rate of
interest.

Illustrative Examples
E i . 1: A coat is sold for Rs 60 or Rs 20 cash down payment
and Rs 8 per month for 6 months. Determine the rate
of interest.
Soln: Cash price of the coat = Rs 60
Cash down payment = Rs 20
Amount paid in 6 instalments = Rs (8 x 6) = Rs 48
Total amount paid under instalment plan
= Rs20 + Rs48 = Rs68
Interest charged = Rs 68 - Rs 60 = Rs 8
Now we find the principals for each of the six months.
Principal for the first month = Rs 60 - Rs 20 = Rs 40
Principal for the second month = Rs 40 - Rs 8 = Rs 32
Principal for the third month = Rs 32 - Rs 8 = Rs 24
Principal for the fourth month = Rs 24 - Rs 8 = Rs 16

Principal for the fifth month = Rs 16 - Rs 8 = Rs 8

Principal for the sixth month = Rs 8 - Rs 8 = Rs 0
.-. Total Principal = Rs 120
Therefore, interest on Rs 120 for 1 month or year
12 '
is Rs 8.
Rate % =

57x100
PxT

8x100
120x

8x100x12

12

= 80%
120x1
Hence the rate o f interest is SO%.
Ex2: A television is marked at Rs 3575 cash or Rs 1500 as
cash down payment and Rs 420 a month for 5 months.
Find the rate of interest for this instalment plan.
Soln: Cash price = Rs 3 575
Cash down payment = Rs 1500
Amount paid in 5 monthly instalments
= Rs(420x5) = Rs2100
.-. Total amount paid under instalment plan
= Rs 1500 + Rs2100 = Rs3600
.-. Interest charged = Rs 3600 - Rs 3575 = Rs 25
The principal for each month is as under:
Principal for the lstmonth =Rs3575-Rs 1500
= Rs2075
Principal for the 2nd month = Rs 2075 - Rs 420
= Rsl655
Principal for the 3rd month = Rs 1655 - Rs 420
= Rs 1235
Principal for the 4th month = Rs 123 5 - Rs 420
= Rs815
Principal for the 5th month = Rs 815 - Rs 420
= Rs395
Total Principal = Rs 6175
The final (sixth) instalment of Rs 420 consists of the
amount of Rs 395 and the interest of Rs 25 (Rs 395 +
Rs25 = Rs420).

PRACTICE BOOK ON QUICKER MATHS

310

Thus, the interest on Rs 6175 for 1 month or year

is Rs 25.
1=

PxTxR
100

Hence the rate of interest is 6.5%

A radio is available for Rs 950 cash or Rs 200 cash
down payment and 10 monthly instalments of Rs 80
each. Find the rate o f interest charged.
Soln: Cash price = Rs 950
Cash down payment = Rs 200
.-. Amount paid in 10 monthly instalments = Rs (80
10) = Rs800
.-. Total amount paid under instalment plan =Rs800
+ Rs 200 = Rs 1000
.'. Interest charged = Rs 1000 - Rs 950 = Rs 50
Principal for 1 st month = Rs 950 - Rs 200 = Rs 750
Principal for 2nd month = Rs 750 - Rs 80 = Rs 670
Principal for 3rd month = Rs 670 - Rs 80 = Rs 590
Principal for 4th month = Rs 590 - Rs 80 = Rs 510
Principal for 5th month = Rs 510 - Rs 80 = Rs 430
Principal for 6th month = Rs430-Rs80 = Rs350
Principal for 7th month = Rs 350 - Rs 80 = Rs 270
Principal for 8th month = Rs 270 - Rs 80 = Rs 190
Principal for 9th month = Rs 190 - Rs 80 = Rs 110
Principal for 10th month = Rs 110 - Rs 80 = Rs 30
Total Principal for 1 month
= Rs 3900
The last instalment of Rs 80 comprises Rs 30 plus Rs
50 interest.
Ex 4:

7x100
R(Rate)=
-j^r

25x100
6175x 1_
12

25x100x12

1200

= 4.86%
6175x1
247
Hence the rate of interest is 4.86%.
Ex3: A house is sold for Rs 30000 cash or Rs 17500 as cash
down payment and instalments of Rs 1600 per month
for 8 month. Determine the rate of interest correct to
one decimal place, under the instalment plan>
Soln: Cash price = Rs 30000
Cash down payment = Rs 17500
Total amount paid in 8 monthly instalments
= Rs(1600x8) = Rsl2800
Total amount paid under instalment plan
= Rs 17500 + Rs 12800 = Rs 30300
Interest charged = Rs 30300 - Rs 30000 = Rs 300
Principal for 1 st month = Rs 30000 - Rs 17500
Rs12500
Principal for 2nd month Rs 12500-Rs 1600
Rs10900
Principal for 3rd month
Rs10900-Rs 1600
Rs9300
Principal for 4th month
Rs 9300-Rs 1600
Rs7700
Principal for 5th month
Rs 7700-Rs 1600
Rs6100
Principal for 6th month
Rs6100-Rsl600
Rs4500
Principal for 7th month
Rs 4500-Rs 1600
Rs2900
Principal for 8th month
Rs 2900-Rs 1600
Rsl300
Total Principal = Rs 55200
The last instalment of Rs 1600 includes Rs 1300 plus
Rs 300 interest.
1
Time = 1 month = 12
year, Interest = Rs 300
7=

PxTxR

R (Rate)

100
300x100
12

PxT

300x100x12 _ 150
55200

55200x

7x100

23

6.52

Time = 1 month

l_
:

year, I = Rs 50

12
7=

PxTxR
R(Rate)

100
Rate =

7x100
:

PxT

50x100

50x100x12

2oo

3900x

3900

13

12

1 5

A
13

Hence the rate of interest is 15%

13
Type 2: Rate of interest being given, to find the monthh
instalment.

Illustrative Examples
Ex. 1: A pocket transistor is sold for Rs 125 cash or for Ri
26 as cash down payment followed by 4 equal monthh
instalments. I f the rate of interest charged is 25% per
annum, determine the monthly instalment.
Soln: Cash price of the transistor = Rs 125
Cash down payment = Rs 26
Balance of price due = Rs 125 - Rs 26 = Rs 99
Rate of interest charged = 25% p.a.
Interest on Rs 99 for 4 months

= Rs

99x x 2 5
12
100

Rs = 7^8.25
4

Problems Based on Instalment

311
Cash down payment = Rs 105
.-. Balance to be paid in 3 equal monthly instalments
= Rs485-Rsl05 = Rs380
Rate of interest = 16% p.a.
Interest on Rs 380 for 3 months

PxTxR
100
.-. Amount due = Rs 99 + Rs 8.25 = Rs 107.25 ....(i)
Let monthly instalment be x rupees
.-. At the end of 4th month
1 st instalment of Rs x will amount to

Rs

3
^
xx x25
12
+ 100

380x x l 6
12
= Rs 15.20
= Rs100

A', * + ] = /&
16 J
16

100

2nd instalment of Rs x will amount to

'
Rs x +

f
Rs *

2
25
25x
<
(
x\
12

= Rs
Rs x + = Rs
24
100
24

2
xx x 16
1 2
100

Rs * +

2*
75

77*

= Rs

75

XZ:>

2nd instalment of Rs x will amount to

V
3rd instalment of Rs x will amount to

Rs
xx x25
12
= Rs * + Rs x +
100
48

Rs

49x

Rs\ +

25*
24

xx0xl6
:

100

f 7 7 * 76*
?|
Rs\
+ * = Rs
I. 75
75
)

49*
48

+*

^75~

= Rsx

llx + 16x + 15x

75

_ 228
76
= Rs
* = Rsx
75
25
From (i) and (ii), we get

51* + 50* + 49x + 48*

48

_ 198* _ 33
= Rs
= Rs*
48
8

76*

. Total amount payable under instalment plan

Rs x

Total amount of 4 instalments at the end of 4th

.17*
month = Rs\-+
' 16

Rs

3rd instalment of Rs x will amount to

48

4th instalment of Rs x will amount to

xx Ox 25
Rs * + 100

2*
Rs * + 75

*x x l 6
+ 12
100

Rs

100

.-. Amount due = Rs 380 + Rs 15.20 = Rs 395.20... (i)

Let the monthly instalment be Rs x.
1 st instalment of Rs x will amount to

PxTxR

A=P+I=P+

PxTxR

76
25
Cjil
"~

* = 395.20

395.20x25

9880

76

76

* =

130

Hence the monthly instalment = Rs 130.

From (i) and (ii), we get

33
107.25x28 858
^
* = 107.25 => x =
=
= 26
8
33
33
Hence the monthly instalment is Rs 26.
Ex. 2: A ceiling fan is marked at Rs 485 cash or Rs 105 cash
down payment followed by 3 equal monthly
instalments. I f the rate of interest charged under this
instalment plan is 16% per annum, find the monthly
instalment.
Soln: Cash price of the ceiling fan = Rs 485

Exercise
1.

2.

3.

An electric iron is sold for Rs 110 cash or for Rs 50 cash

down payment followed by Rs 62 after a month. Find the
rate of interest charged under instalment plan.
A bicycle is sold for Rs 400 cash or Rs 160 cash down
payment followed by 2 monthly instalments of Rs 130
each. Find the rate of interest.
A pressure cooker is available on Rs 180 cash or for Rs
70 cash down payment followed by Rs 60 a month for 2
months. Find the rate of interest charged under instalment plan.

PRACTICE BOOK ON QUICKER MATHS

312
4.

A television set is priced at Rs 2400 cash or Rs 1200 cash

down payment followed by 6 monthly instalments of Rs
225 each. What rate of interest will the dealer charge
under instalment plan?
5. A mixi is marked at Rs 1000 cash or Rs 250 cash down
payment followed by Rs 200 a month for 4 months. Find
the rate of interest for this instalment plan.
6. A room cooler is marked at Rs 2000 cash or Rs 400 cash
down payment followed by Rs 300 per month for 6
months. Determine the rate of interest charged under
this instalment plan.
7. A watch is sold either for Rs 180 cash or for Rs 40 cash
down payment followed by Rs 30 a month for 5 months.
Determine the rate of interest.
8. Determine the interest rate charged under each of the
following instalment plans.
Article
Cash
Cash
Each
No. of
price
down
instalment monthly
payment
instalments
TV
2575
1000
300
6
(ii) Refrigerator
3580
1500
440
5
(iii) Typewriter
3600
1200
280
10
(iv) Tape recorder 1600
300
175
8
9. An article is sold for Rs 100 each or for Rs 10 as cash
down payment followed by 5 equal monthly instalments.
I f the rate of interest charged under instalment plan be
48% per annum, determine the monthly instalment.

Principal for 1 st month - Rs 240

Principal for 2nd month = Rs 240 - Rs 130 = Rs 110
Total Principal = Rs 350
Thus, Rs 20 is the interest on Rs 350 for 1 month or
J_

year.

12
.-. 7 =

PxTxR
100

PxT

"

20x100

R=

7x100

R=

20x100x12
350

350 x

480 = 6 8 l
7
7

12
Hence the rate of interest is 68%p

Cash price of the pressure cooker = Rs 180

Cash down payment = Rs 70
Balance to be paid = Rs 180 - Rs 70 = Rs 110
Monthly instalment = Rs 60
.-. Amount paid in 2 equal monthly instalments Rs
(60x2) = Rsl20
.-. Interest charged = Rs 120 - Rs 110 = Rs 10
Principal for 1 st month = Rs 110
Principal for 2nd month = Rs 110 - Rs 60 = Rs 50
Total Principal for 1 month = Rs 160
Thus, Rs 10 is the interest on Rs 160 for 1 month or

Answers
1.

Cash price of the electric iron = Rs 110

Cash down payment = Rs 50
Balance to be paid after 1 month
= R s l l O - R s 5 0 = Rs60
Monthly instalment = Rs 62
.-. Interest = Rs 62 - Rs 60 = Rs 2
Thus Rs 2 is charged as interest on Rs 60 for 1 month
1
or year
12
3

PxTxR

R(Rate) =

7x100

100
2x100

2x100x12
60

60 x

PxT

= 40

12
Hence the rate of interest is 40%.
Cash price of bicycle = Rs 400
Cash down payment = Rs 160
Balance to be paid = Rs 400 - Rs 160 = Rs 240
Monthly instalment = Rs 130
.-. Amount paid in 2 equal monthly instalments
= Rs(130x2) = Rs260
.-. Interest charged = Rs 260 - Rs 240 = Rs 20

year.
7?:

7x100
PxT

10x100
160x

10x100x12
= 75
160

12
Hence the rate of interest is 75% per annum.
Cash price of the television set = Rs 2400
Cash down payment = Rs 1200
Balance to be paid = Rs 2400 - Rs 1200 = Rs 1200
Monthly instalment = Rs 225
.-. Amount paid in 6 equal monthly instalments = Rs
(225x6) = Rsl350
Interest charged = Rs 1350 - Rs 1200 = Rs 150
Principal for 1st month = Rs 1200
Principal for 2nd month = Rs 1200 - Rs 225 = Rs 975
Principal for 3rd month = Rs 975 - Rs 225 = Rs 750
Principal for 4th month = Rs 750 - Rs 225 = Rs 525
Principal for 5th month = Rs 525 - Rs 225 = Rs 300
Principal for 6th month = Rs 300 - Rs 225 = Rs 75
Total principal for 1 month = Rs 3825
Thus, Rs 150 is the interest on Rs 3 825 for 1 month or

12

year

Problems Based on Instalment

R

7x100
PxT

Rs

313

150x100

7?:

7x100

200x100

PxT

5100x
12

3825 x
12

150x100x12

800

3825

200x100x12 ,_ 800 _

:4717

5100

~ 17

J_
17

Hence the rate of interest is 47 j y % pa

Hence, the rate of interest is 47% p

Cash price of the mixi = Rs 1000

Cash down payment = Rs 250
Balance to be paid = Rs 1000 - Rs 250 = Rs 750
Monthly instalment = Rs 200
.-. Amount paid in 4 equal monthly instalments = Rs
(200x4) = Rs800
.-. Interest charged = Rs 800 - Rs 750 = Rs 50
Principal for 1st month = Rs 750
Principal for 2nd month = Rs 750 - Rs 200 = Rs 550
Principal for 3rd month = Rs 550 - Rs 200 = Rs 350
Principal for 4th month = Rs 350 - Rs 200 = Rs 150
Total Principal for 1 month = Rs 1800
Thus Rs 50 is the interest on Rs 1800 for 1 month or

Cash price of the watch = Rs 180

Cash down payment = Rs 40
.-. Balance to be paid = Rs 180 - Rs 40 = Rs 140
Monthly instalment = Rs 30
.-. Amount paid in 5 equal monthly instalments
= Rs(30x5) = Rsl50
.-. Interest charged = Rs 150-Rs 140 = Rs 10
Principal for 1 st month = Rs 140
Principal for 2nd month = Rs 140 - Rs 30 = Rs 110
Principal for 3rd month = Rs 110 - Rs 30 = Rs 80
Principal for 4th month = Rs 80 - Rs 30 = Rs 50
Principal for 5th month = Rs 50 - Rs 30 = Rs 20
Total principal for 1 month = Rs 400

^year

Thus Rs 10 is the interest for 1 month or year on

12
Rs400

7? =

7x100
P

50x100
1800x
12

7? =

50x100x12
1800

1
Hence the rate of interest is 33% pa
Cash price of the room cooler = Rs 2000
Cash down payment = Rs 400
Balance to be paid = Rs 2000 - Rs 400 = Rs 1600
Monthly instalment = Rs 300
.-. Amount paid in 6 equal monthly instalments = Rs
(300x6)= 1800
.-. Interest charged = Rs 1800 - Rs 1600 = Rs 200
Principal for 1st month = Rs 1600
Principal for 2nd month = Rs 1600 - Rs 300 = Rs 1300
Principal for 3rd month = Rs 1300 - Rs 300 = Rs 1000
Principal for 4th month = Rs 1000 - Rs 300 = Rs 700
Principal for 5th month = Rs 700 - Rs 300 = Rs 400
Principal for 6th month = Rs 400 - Rs 300 = Rs 100
Total principal for 1 month = Rs 5100
Thus Rs 200 is the interest on Rs 5100 for 1 month or

8.(i)

year

PxT

10x100
400 x

j_

10x100x12
:30
400

12

Hence, the rate of interest is 30% pa

Cash price ofTV = Rs 2575
Cash down payment = Rs 1000
.-. Balance to be paid = Rs 2575 - R s 1000 = Rs 1575
Monthly instalment = Rs 300
.-. Amount paid in 6 equal monthly instalments
= R s ( 3 0 0 6 ) = Rsl800
.. Interest charged = Rs 1800 - Rs 1575 = Rs 225
Principal for 1 st month = Rs 1575
Principal for 2nd month = Rsl575-Rs300 = Rsl275
Principal for 3rd month = Rs 1275 - Rs 300 = Rs 975
Principal for 4th month = Rs 975 - Rs 300 = Rs 675
Principal for 5th month = Rs 675 - Rs 300 = Rs 375
Principal for 6th month = Rs 375 - Rs 300 = Rs 75
Total principal for 1 month = Rs 4950
Thus Rs 225 is the interest on Rs 4950 for 1 month or
x

12

year

7?:
12

7x100

7x100
PxT

225x100
4950 x
12

PRACTICE BOOK ON QUICKER MATHS

14
225x100x12

600

Hence, the rate of interest is 41.67% pa

(iv) Cash price of the tape recorder = Rs 1600
Cash down payment = Rs 300
Balance to be paid = Rs 1600-Rs 300 = Rs 1300
Monthly instalment = Rs 175
Amount paid in 8 equal monthly instalments = Rs
(175 x8) = Rs 1400
.-. Interest charged = Rs 1400-Rs 1300 = Rs 100
Principal for 1 st month = Rs 1300
Principal for 2nd month = Rs 1300-Rs 175 = Rs 1125
Principal for 3rd month = Rs 1125- Rs 175 = Rs950
Principal for 4th month = Rs 950 - Rs 175 = Rs 775
Principal for 5th month = Rs 775 - Rs 175 = Rs 600
Principal for 6th month = Rs 600 - Rs 175 = Rs 425
Principal for 7th month = Rs 425 - Rs 175 = Rs 250
Principal for 8th month = Rs250-Rsl75 = Rs75
Total principal for 1 month = Rs 5500
Thus, Rs 100 is the interest on Rs 5500 for 1 month or

= 54.55

4950x1
11
Hence the rate of interest is 54.55% pa
(ii) Cash price of the refrigerator = Rs 3580
Cash down payment = Rs 1500
.-. Balance to be paid = Rs 2080
Monthly instalment = Rs 440
.-. Amount paid in 5 equal monthly instalments = Rs
(440x5) = Rs2200
.-. Interest charged = Rs 2200 - Rs 2080 = Rs 120
Principal for 1st month = Rs 2080
Principal for 2nd month = Rs 2080 - Rs 440 = Rs 1640
Principal for 3rd month = Rs 1640 - Rs 440 = Rs 1200
Principal for 4th month = Rs 1200 - Rs 440 = Rs 760
Principal for 5th month = Rs 760 - Rs 440 = Rs 320
Total principal for 1 month = Rs 6000
Thus, Rs 120 is the interest on Rs 6000 for 1 month or
^year
R =

7x100
PxT

120x100
6000 x

120x100x12
600x1

12
24

12

Hence the rate of interest is 24% pa

(iii) Cash price of the typewriter = Rs 3600
Cash down payment = Rs 1200
.-. Balance to be paid = Rs 3600 - Rs 1200 = Rs 2400
Monthly instalment = Rs 280
.-. Amount paid in 10 equal monthly instalments = Rs
(280 x 10) = Rs2800
.-. Interest charged = Rs 2800 - Rs 2400 = Rs 400
Principal for 1 st month = Rs 2400
Principal for 2nd month = Rs 2400 - Rs 280 = Rs 2120
Principal for 3rd month = Rs 2120 - Rs 280 = Rs 1840
Principal for 4th month = Rs 1840 - Rs 280 = Rs 1560
Principal for 5th month = Rs 1560 - Rs 280 = Rs 1280
Principal for6th month = Rs 1280-Rs280 = Rs 1000
Principal for 7th month = Rs 1000 - Rs 280 = Rs 720
Principal for 8th month = Rs 720 - Rs 280 = Rs 440
Principal for 9th month = Rs 440 - Rs 280 = Rs 160
Principal for 10th month = Rs 160 - Rs 2 8 0 = - Rs 120
Ignore the negative principal
.-. Total principal for 1 month = Rs 11520
Thus, Rs 400 is the interest on Rs 11520 for 1 month
1
or year
12
7? =

7x100
PxT

7? =

7x100
PxT

9.

125
3

= 41.67

5500x
12
240

5500x1

11

= 21.81

Hence, the rate of interest charged is 21.8% pa

Cash price of the article = Rs 100
Cash down payment = Rs 10
.-. Balance to be paid = Rs 100 - Rs 10 = Rs 90
Rate of interest charged = 48% pa
Interest on Rs 90 for 5 months or year is
12

= Rs

90x x 4 8
12
100

; R s

90x5x48
12x100

Amount due = Rs 90+ Rs 18 = Rs 108 ....(i)

Let the monthly instalment be x rupees
.-. At the end of 5th month:
1st instalment of Rs x will amount to

Rs

xx x48
12
x+
100

A =P+ I= P+

11520x

100x100

100x100x12

400x100
12

400x100x12
11520x1

year

J
PxTxR
100

4x
29x
= Rs x + =Rs
25 J
25

Problems Based on Instalment

315

2nd instalment of Rs x will amount to

3
^
x x x48
3x
28*
12
Rs x +
= Rs x +
= Rs
100
25 J
25
J
3rd instalment of Rs x will amount to
2
^
xx x48
12
Rs x +
100

The amount of Rs P in 2 years at 5%

2*"|
27x
Rs x + =Rs
.
25j
25

26*
25

5th instalment of Rs * will amount to

* + 0x48 l
Rs * + 100
>

Rsx

Total amount of 5 instalments at the end of 5 months

29*

Rs

28*

= Rs

27*

Annual payment

26*

+*

1, 25
25
25
25
29* + 28* + 27* + 28* + 25*

-2T

27*
= R S

....(ii)

1.

2.

From (i) and (ii), we get

3.
27*
5

= 108

108x5
* =
= 20
27
4.

Each instalment = Rs 20
Type 3: To find the annual payment to discharge a debt if the
rate per cent is given.
Theorem: The annual payment that will discharge a debt
ofRs A due in tyears at the rate of interest r% per annum is
\QQA

5.

6.

Illustrative Example

7.

Ex.:

What annual payment will discharge a debt of Rs 770

due in 5 years, the rate of interest being 5% per annum?
Soln: Detail Method: Let the annual payment be P rupees.
The amount of Rs P in 4 years at 5%
100P + 4x5P

120P

100

100

100
105 P
100

100x770
5x5(5-1)
100x5 +

fa 140

Exercise

25
135*

= R S

nop

These four amounts together with the last annual

payment of Rs P will discharge the debt of Rs 770.
120P 115P HOP 105P
-+P = 770
100
100
100
100
550 P
770
100
770x100
= 140
P=
550
Hence, annual payment = Rs 140
Quicker Method: Applying the above theorem, we
have,

)
4th instalment of Rs x will amount to

= Rs

100

The amount of Rs P in 1 year at 5% =

1
*
xx x48
12
Rs x +
= Rs x +
100
25

115P

The amount of Rs P in 3 years at 5% =

What annual instalment will discharge a debt of Rs 2210

due in 4 years at 7% simple interest?
a)Rs450
b)Rs500
c)Rs550
d)Rs575
What quarterly payment will discharge a debt of Rs 2120
in one year at 16% per annum simple interest?
a)Rsl000
b)Rs400
c)Rs850
d)Rs500
What annual payment will discharge a debt of Rs 193 5 0
due 4 years hence at the rate of 5% simple interest?
a)Rs4600
b)Rs3500
c)Rs4500
d)Rs4550
Find the annual instalment that will discharge a debt of
Rs 12900 due in 4 years at 5% per annum simple interest.
a)Rs3500
b)Rs2500
c)Rs3000
d)Rs3200
Find the annual instalment that will discharge a debt of
Rs 5400 due in 5 years at 4% per annum simple interest.
a)Rsl200
b)Rsl000 c)Rs800
d)Rsl050
What quarterly payment will discharge a debt of Rs 2280
due in two years at 16% per annum simple interest?
a)Rs500
b)Rs450
c)Rs550
d)Rs250
(Bank PO Exam 1989)
What annual payment will discharge a debt of Rs 580
due in 5 years, the rate being 8% per annum?
a)Rs 166.40 b)Rsl20
c)Rsl00
d)Rs65.60

Answers
1. b;

Hint: Required annual payment

100x2210
7x4(4-1)
100x4 +

100x2210
442

= Rs500

PRACTICE BOOK ON QUICKER MATHS

316
2. d;

Hint: Here instalment is quarterly. Hence from the

16

question, we have, t = 4 and r = - 4 /o

Now applying the given rule,
100x2120
required answer
4 x 4(4 - 1 )
100x4 +

3. c;

100x2120
424

A sum of Rs 3 310 is to be paid back in 3 equal annual

instalments. How much is each instalment if the interest is compounded annually at 10% per annum.
Soln: First Method: Let each equal annual instalment be Re
1.
.-. The 1st instalment is paid after a year
.-. Principal of the 1st instalment

= Rs 500.
Hint: Required answer
A = P\l +

100x19350

100x19350
5x4x3
100x4 +
4. c;

Illustrative Example
Ex:

0 /

430

= Rs4500.
:Relx!K
11

e^
11

100 J

Hint: Required answer

P = Ix

100x12900
= Rs 3000
430

100x12900
5x4(4-1)
100x4 +

100

10

10

17

Similarly, the principal of 2nd instalment

5. b;

Hint: Required answer

A
100x5400
4x5x(5-l)
100x5 +

6. d;

2280x100
912

Re

10

Relx

Re

100
121

1000
1331

Total of the three principals

(10
= Rs
ll

= Rs 250.

00
121

1000
+

1331

1210 + 1100 + 1000 3310

= Rs
= Rs1331
1331

Hint: Required answer

100x580
8x5x(5-l)
100x5 +

Relx

The principal of 3rd instalment

Hint: Here, t = 8 and r = 4% [Since, payment is quarterly for 2 years]

Now, applying the given rule, we have the
required answer
100x2280
8x7x4
100x8 +

7. c;

100x5400
:Rsl000.
540

100x580
= Rsl00
500x580

Case - 2: Based on Compound Interest

The problems o f money lending in which the payment is made in instalments and the range normally is in
years. In such cases compound interest computations are
used.
Type I: To find each instalment when the instalments are
equal
Theorem: A sum of Rs P is to be paid back in n equal
annual instalments. If the interest is compounded annually
atR% per annum, then the value of each instalment is given

When the principal is Rs

3310
, .
f

each instalment = Re 1
When the principal is Re 1 each instalment
D i
= Relx

3310
When the principal is Rs 3310 each instalment
1331-x3310 = R s i 3 3 i
3310
.-. Each instalment = Rs 1331
Second Method: Let each equal annual instalment be
= Rs

Rs x and P ,P ,P ,
be respectively the principals for
the three instalments.
The first instalment is paid after a year
l

.-. Principal (P ) of the first instalment

l

by
100
IQ0 + R

100
100 + /?

/
+ ...+

100

V100 + /?

xx-

10

\0x

11

11

Problems Based on Instalment

317
Principal:

Similarly p =
2

10

Forthe lstyear=

>

( loo V
Uoo+/?,

in

For the 2nd year = RsX\

3310

Now P + P + P
x

lOx
+x

i.e. 11

100
(ioo + /?

01;

ho]
+X

3310

OU

10^ , 10 fio
1++
11 \
11

For the tth year =

( loo V
100 + /?

Interest Charged:
= 3310
100
Interest in 1st instalment = ^* *

TioY,

10 100

UiA

i i 121

1+ +

100 + /?,

3310
Interest in 2nd instalment - Rs X 1 -

100
= 3310

Interest in nth instalment = ^

UUU21
11 121
x = 3310x x
1331
10 331
Hence the required annual instalment = Rs 1331
Quicker Method: Applying the above theorem, we
have the
3310
JQQ JQQQ"

required annual instalment = JQ

TT T 2 T 1331
+

_ 3310x1331
3310

/fr 1331-

T*pe II: Tofindthe Principal when each instalment is given.

TWorem: A man borrows some money on compound inter znd returns it in t years in n equal instalments. If the rate
Wmterest is R% and the yearly instalment is Rs X, then the
nt borrowed is given by
100

100

100 + /?

Uoo+/?

100 >

Ex:

A man borrowed some money and paid back in 3 equal

annual instalments of Rs 2160 each. What sum did he
borrow, if the rate of interest charged by the money
lender was 20% per annum compounded annually?
Find also the total interest charged. Also calculate
the principal and interest charged with each instalment.
Soln: Detail Method
Amount of each annual instalment = Rs 2160
Rate of interest = 20% p.a. Number of instalments = 3
Principal for the 1st year = Rs

2160
20
1+
100

= Rs 2 1 6 0 x - = Rs 1800
6
t'
\
v A = 1+

H\

IOOJ

\
20 \
2160 = p 1 +
I
100,

Uoo+/?j

100 "

100 + /?,

Illustrative Example

100

>

: 1. To find the total interest charged we use the following formula,

100 + /?,

1 0 Y 1 2 1 + 110 + 1001 = 3310

121
10Y33]

100

100 ^

[ l 0 0 + rt; * ^100 + /?; + ....+ 100 + /?J

V

2. To calculate the principal and interest charged with

each instalment following formula is used.

Principal for the 2nd year

25
= f a 2 1 6 0 x - 1 =/?s2160x = /?il500
6)
36
Principal forthe 3rd year
K

- Rs 2160 <| -

/ & 2 1 6 0 x =/?5l250
216

PRACTICE BOOK ON QUICKER MATHS

318
Amount borrowed = Sum of the principals for all the
three years = Rs (1800 + 1500 + 1250) = Rs 4550
Total interest charged
= Total amount of the three instalments - Amount
borrowed
= Rs (2160 * 3 - 4550) = Rs (6480 - 4550) = Rs 1930
Interest in 1st instalment
= 1st instalment - Principal for 1st instalment
= Rs (2160-1800) = Rs 360
Interest in 2nd instalment
= 2nd instalment - Principal for 2nd instalment
= Rs (2160-1500) = Rs 660
Interest in 3rd instalment
= 3rd instalment - Principal for 3rd instalment
= Rs(2160-1250) = Rs910
Quicker Method: Applying the above theorem, we have
(i) Amount borrowed
2160

100

( 100
V100 + 20

100

100+20 UOO+20)

5 25 125
2160 + +
6 36 216

balance at R% and is to be included in each instalment,

then the value of each instalment is given by the following,
Instalment at the end of 1 st year = Rs

1+

Rn
100

Instalment at the end of 2nd year = Rs

100
R(n-2)

Instalment at the end of 3rd year = Rs

1+

Instalment at the end of 4th year = Rs

R(n-3)~
1+
100

Instalment at the end of nth year = Rs

1+100

100

Note: Number of instalments = no. of years.

Now, we can alternatively write the above theorem as
follows.
Value of instalment at the end of required year

= 1800+ 1500+ 1250 = Rs4550

Sum which is to be paid back

, .5 25 125
(ii) Total interest charged = 2160 3 H - + +
6 36 216
= Rs (6480- 4550) = Rs 1930
(iii) Interests - in
1st instalment = 2160| 1 - - = Rs 360

No. of instalments
(Rate per cent) (no. o f instalments - one less the year
after which instalment is payable)
1+
100

Illustrative Examples
Ex.1:

2nd instalment -

3rd instalment =

I-

25

Rs 660

36.
1-

125
216

= Rs9lO

(iv) Principal for the

lstyear= Rs 2 1 6 0 x - = Rs 1800
6
25
2nd year = Rs 2160x = Rs 1500
36
125
3rd year = Rs 2\60x~

A sum of Rs 7500 is to be paid back in 3 annua,

instalments. How much is each instalment, if the interest is compounded annually on the balance at 4
and is to be included in each instalment.
Soln: The loan is to be paid in 3 annual instalments.
.-. Each instalment will be of Rs (7500- 3) or Rs 2500
together with the interest on the balance for 1 year
Amount payable at the end of 1 st year
= Rs 2500 + 4% of Rs 7500

= Rs 1250

Type III: Tofindeach instalment when the instalments are

not equal.
Theorem: A sum of Rs P is to be paid back in n annual
instalments. If the interest is compounded annually on the

= Rs2500 + Rs - i - x 7 5 0 0
100
= Rs 2500 + Rs 300 = Rs 2800
Balance at the end of first year
= Rs 7500 - Rs 2500 = Rs 5000
.-. Amount payable at the end of 2nd year
= Rs2500 + 4%ofRs5000
= Rs2500 + Rs *5000
= Rs 2500 + Rs 200 = Rs 2700

Problems Based on Instalment

319

Balance at the end of 2nd year = Rs 5000 - Rs 2500 =

Rs2500
.-. Amount payable at the end of 3rd year
= Rs 2500 + 4% of Rs 2500
4
= Rs 2500 + Rs x 2500
= Rs 2500 + Rs 100 = Rs 2600
Hence the three instalments are Rs 2800, Rs 2700 and
Rs2600
Quicker Method: Applying the above theorem, we
have
Amount payable at the end o f 1 st year
7500

1+

4x(3-0)
[see note]

100
= Rs2800

Amount payable at the end o f 2nd year

75001~.1 + -4 x ( 3 - l )
100

Rs2700

Amount payable at the end o f 3rd year

7500

1+

4(3-2)'
25

= 2500 + 100 = Rs 2600

Ex 2: A loan of Rs 12000 is to be paid back in 6 annual
instalments. How much is each instalment i f the interest is compounded annually on the balance at 5%
and is included in each instalment?
Soln: Detail Method:
The loan is to be paid in 6 annual instalments.
.-. Each instalment will be ofRs 12000 + 6 or Rs 2000
together with interest on the balance for 1 year.
Amount payable at the end of 1st year
= Rs 2000 + 5% of Rs 12000
= Rs2000 + Rs

12000

= Rs 2000 + Rs 600 = Rs 2600

Balance at the end of first year
= Rs 12000 - Rs 2000 = Rs 10000
Amount payable at the end of 2nd year
= Rs 2000 + 5 % ofRs 10000
5
-x10000
= Rs2000 + Rs 100
= Rs 2000+ Rs 500 = Rs 2500
Balance at the end of 2nd year
= Rs 10000 - Rs 2000 = Rs 8000
Amount payable at the end of 3rd year
= Rs 2000+ 5% ofRs 8000
= Rs2000 + Rs 7 ^ *

= Rs 2000 + Rs 400 = Rs 2400

Balance at the end of 3rd year
= Rs 8000 - Rs 2000 = Rs 6000
Amount payable at the end of 4th year
= Rs 2000 + 5% ofRs 6000
= Rs2000 + Rs ]

= Rs 2000 + Rs 300 = Rs 2300

Balance at the end of 4th year
= Rs 6000 - Rs 2000 = Rs 4000
Amount payable at the end of 5th year
= Rs 2000+ 5% ofRs 4000
= Rs2000 + Rs j ^ x 4 0 0 0
= Rs 2000 + Rs 200 = Rs 2200
Balance at the end of 5th year
= Rs 4000 - Rs 2000 = Rs 2000
Amount payable at the end of 6th year
= Rs 2000+ 5% ofRs 2000
= Rs2000 + Rs T 5 o "

x 2 0 0 0

= Rs2000 + Rsl00 = Rs2100

Hence the six instalments are Rs 2600, Rs 2500, Rs
2400, Rs 2300, Rs 2200, Rs 2100.
Quicker Method: Applying the given rule we have,
Amount payable at the end of 1 st year
12000

= 2000 +

5x(6-0)
1+
100
2

10

= Rs 2600

Amount payable at the end of 2nd year

12000

1+

5x(6-l)
100

= 2000 +500 = Rs 2500

Similarly we can find the remaining instalments as Rs
2400, Rs 2300, Rs 2200 and Rs 2100.
Type IV: To find cash price when different instalments are
given.
Theorem: A person buys an item on the terms that he is
required to Rs P cash down payment followed by Rs x at
the end offirst year, Rsy at the end of secondyear and Rs z
at the end of thirdyear. Interest is charged at the rate ofR%
per annum, then the
(i)
Cash price of the item is given by
100

100

100

,2"

+ 2
Rs P + x+ y
\Q0+R
\100 + RJ
{100+R,
00 The total interest charged is given by
Rs[P + x + y + z- Cash Price]

and

PRACTICE BOOK ON QUICKER MATHS

320

Illustrative Example

cash price of the refrigerator

Ex:

Subash purchased a refrigerator on the terms that he

is required to pay Rs 1500 cash down payment followed by Rs 1020 at the end of first year, Rs 1003 at
the end of second year and Rs 990 at the end of third
year. Interest is charged at the rate of 10% per annum.
Calculate the cash price and the total interest charged.
Soln: Detail Method: Let the cash price of the refrigerator
beRsx
Cash down payment = Rs 1500
.-. Remaining amount = Rs (x - 1500)
Let P , P , P be the principals of the three annual
x

10
1020 + 1003x + 990x
= 1500 + 11
121
11
= 1500

v A = P\l +

11

121

= 1500 +2500 = Rs 4000

Total interest charged
= 1500+1020+1003 + 990-4000 = Rs513

Exercise
1.

instaments. Then
'
10 ^
1020 = / j 1 + 100

10 123420 + 110330 + 99000

10,
2.

100

P =fal020x
x

The price of a tape recorder is Rs 1500. A customer purchased it by paying a cash sum of Rs 300 and the balance with due interest in three half yearly equal
instalments. I f the dealer charges interest at the rate of
5% per annum compounded half yearly, find the value of
each instalment.
A dealer offers a refrigerator for Rs 3000 on cash payment. A customer agrees to pay Rs 1000 cash down and
the balance with due interest in three equal annual
instalments. I f the dealer charges an interest of 1 2 ~
C/

Similarly 1003 = A

11

IOOJ

3.

P = 1003

(TT)

and 990 = P | 1 +

4.

10

990

10

In

\ 2 * i = fa

P P

100

5.
1 0

20x^ 1003W
11
[nj
+

Rs=\ + 9 9 0 x
11V.
11

= Rs

2 +

99(/^
[u

121

10 (123420 + 110330 + 99000

TT

121

_ 10 332750
= Rs-x
= Rs 2500
11
121
x -1500 = 2500 :=> x = 2500 +1500 = 4000
.-. Cash price of the refrigerator ~- Rs 4000
Total sum paid = Rs (1500 + 102-J + 1003 + 990)
= Rs4513
.-. Total interest charged = Rs (4513 - 4000) = Rs 513
Quicker Method: Applying the above theorem, we
have

6.

7.

8.

pa compounded annually, what should be the annount

of each instalment?
A man borrows some money on compound interest and
returns it in two years in two equal instalments. I f the
rate of interest is 5% and yearly instalment is Rs 441:
find the amount borrowed.
A sum of money is to be paid back in 3 annua! instalments
ofRs 2800, Rs 2700 and Rs 2600 payable at the end of 1 st
year, 2nd year and 3rd year respectively. I f rate of interest be 4% pa, calculate the principal and the interest
charged.
One can purchase a flat from a house building socien
for Rs 55000 cash or on the terms that he should pay Rs
4275 as cash down payment and the rest in three equai
yearly instalments. The society charges interest at the
rate of 165 per annum compounded half yearly. If the flat
is purchased under instalment plan, find the value of
each instalment.
A sum o f Rs 5600 is paid back in yearly instalments
How much is each instalment, i f the interest is compounded annually on the balance at 8% per annum anc
is to be included in each instalment?
A sum of Rs 6000 is paid back in 3 annual instalments
How much is each instalment i f the interest is compounded annually on the balance at 10% per annum anc
is to be included in each instalment?
A sum o f Rs 8400 is to be returned in three annua
instalments. What is the annual instalment, if the rate c:
interest is 9 % per annum compounded annually on

Problems Based on Instalment

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

the balance and is to be included in each instalment?

The price of a tape-recorder is Rs 1561. A customer purchased it by paying a cash of Rs 300 and balance with
due interest in 3 half yearly equal instalments. I f the
dealer charges interest at the rate of 10% per annum
compounded half yearly, find the value of each instalment.
A loan ofRs 2550 is to be paid back in two equal half
yearly instalments. How much is each instalment, if the
interest is compounded half yearly at 8% per annum?
A sum ofRs 2600 is to be paid back in 2 equal annual
instalments. What is the annual instalment, if the rate of
interest is 8% per annum compounded annually?
A man borrows Rs 816 and agrees to return it in two
equal annual instalments. What is the annual instalment,
if the rate of interest is 12.5% per annum compounded
annually?
Govind borrowed money from a money lender and agreed
to pay back in 3 equal annual instalments ofRs 665.50
each. What sum did he borrow, i f the rate of interest
charged by the money lender was 10% per annum compounded annually?
A man takes loan on compound interest and returns it in
two equal annual instalments. I f the rate of interest is
16% per annum and the yearly instalment is Rs 1682,
find the principal and the interest charged with each
instalment.
A man borrowed some money and paid back in 3 equal
annual instalments o f Rs 2160 each. What sum did he
borrow if the rate of interest charged by the money lender
was 20% per annum compounded annually? Find also
the total interest charged.
Kusum borrowed money and returned it in 3 equal quarterly instalments ofRs 1630.50 each. What sum did she
borrow if the rate of interest charged by the money lender
was 20% per annum compounded quarterly? Find also
the total interest charged.
Naresh took loan from a bank and the payment was made
in 3 annual instalments ofRs 2600, Rs 2400 and Rs 2200
payable at the end of first, second and third year respectively. Interest was charged at 10% per annum. Calculate
the amount of loan taken and the interest paid by him.
A person borrows Rs 5407.50 and agrees to pay the loan
back with compound interest at the rate of 13 % per

annum in 3 equal half yearly instalments. Find the amount

of each instalment, i f the interest is compounded half
yearly.
19. Sanjay bought a gas stove on instalment basis. He has
to pay Rs 500 cash down payment and Rs 810 at the end
of first year, Rs 520 at the end of second year and Rs 460
at the end of third year. Interest is charged at the rate of

321
15% per annum. Calculate the total cash price of the gas
stove.
20. A dealer advertises that a cassette recorder is sold at Rs
450 cash down followed by two yearly instalments ofRs
680 and Rs 590 at the end of first year and second year
respectively. If the interest charged is 18% per annum
compounded annually, find the cash price of the cassette recorder.
21. A colour TV set purchased under instalment purchase
system. Cash down payment is Rs 2000 and 3 annual
instalments ofRs 1800, Rs 1560 and Rs 1430 are payable
at the end o f first year, second year and third year respectively. I f the rate of interest is 10% per annum respectively, find the cash price of the TV set and the total
interest charged under instalment plan.
22. A sewing machine is available at Rs 240 cash down payment followed by 3 annual instalments of Rs 380, Rs 240
and Rs 200 payable at the end of first year, second year
and third year respectively. If the rate of interest is 25%
per annum compound interest, find the cash price and
total interest being charged under the instalment plan.

Answers
1.

Price of the tape recorder = Rs 1500

Paid cash = Rs 300
Balance to be paid = Rs (1500 - 300) = Rs 1200
Let each half-yearly instalment = Rs x
r = 5% pa = (5/2)% half-yearly, Amount = Rs 1200
;. Using the formula
A= P 1+100

x=P 1+

5/2

1200J

100

U0

Principal (P) included in the first instalment

40 40
xx = x
41 41
Similarly, Principal included in the second instalment
'40

x 2

41
'40^
Principal included in the third instalment

40
41

(40}
x+

40
41'

41;

f '40
x = 1200
x+
\, 4 1 ,
N

40 r40]
+

41

\4\J

1200

.41

PRACTICE BOOK ON QUICKER MATHS

322
40
41'

40
1+
41

1600^
1681

The man paid Rs 441 as the amount at the end of first

year and another Rs 441, as the amount at the end of
second year.
.-. Principal of the first year

= 1200

40 (1681 + 1640 +1600)

_s x\0
B 41 I,
1681
J

n f t

, +
= 441 + 1

4921
41
=>
x = 1200x = 1230
^
1681
40

,,,1
= 441 + 2

1681
=> x = 1230x
20.20
4921
Cash price = Rs 3000
Cash down payment = Rs 1000
Balance = Rs (3000 -1000) = Rs 2000
Let the amount of each instalment = Rs x

1 =441
, +
100 J
100
5

1 0 5

AA,
=441x-=
2

= R s

'
5 f
Principal for the second year = 441 + 1 +
100.

Rate = 12 i % pa = (25/2)% pa

. . . 20 20
= 441x x =Rs400
21 21
.-. Total principal = Rs 420 + Rs 400 = Rs 820
Let the principals for the three annual instalments be

Principal included in the first instalment is given by

P P ,P .

25/2
1+
100

x'-P

A=P

Then

UooJ

:A = P\ +

" 5

25

/>, =Rs2800x

2800= P\ 1 + 100

loo J

P = xx

26

100

8
2

100

Similarly, principal included in the 2nd instalment =

2600=^3

' H i

2b

P =Rs2700x

2700= P \ +

P, =Rs2600x

1+100

6.

(2
26.

Total sum borrowed = P + P + P

x

Principal included in the 3rd instalment = * |

= Rs 2800 26)
x x + x\
9
{?)

x\ | = 20ou

W l + l ^ t ^
9 I
9 81

81

2000

8 217*
-x
= 2000
9
81
2000x81x9
8x217

= Rs 839.86

Amount of each instalment = Rs 839.86

25"

+ 26 x
26
26 26

2500f^
675 625
28 +
+
26 I
26
26
B

=r
= 2000

25

5
Rs^xlOO

R S

8 (81 + 72 + 64

{26)

I '25
+ 2600
1 26

2500 ( 728 + 675 + 625

;Rs

26 V

26

= Rs

2500
26

2028
x26

= Rs2500x3=Rs7500
Total money paid = Rs (2800 + 2700 + 2600) = Rs 8100
.-. Total interest charged = Rs 8100 - Rs 7500 = Rs 600
Cash price of the flat = Rs 55000
In the instalment plan, cash down payment = Rs 4275
.. Present value of the price to be paid in instalments
= Rs 55000 - Rs 4275 = Rs 50725

Problems Based on Instalment

323

Let each instalment be Rs x

Rate = 16% pa - 8% half-yearly
.-. Principal for the 1 st instalment at the end of 1 st
half yearly = Rs

g
1+100

v A = P] 1 +

Rs 1400 + Rs
V
x= P 1+

100 J

100

J5_
100

(25)

'25^

= Rs 27

25
Principal for the 3rd instalment = Rs | ~ I

|'25>

x+\

\ 27J

It should be equal to Rs 50725

27'

f25>
1
1 + +{llj
27
2

2~
= 50725

25 f, 25 625'.
^
x 1 + +
=50725
27 I
27 729,
e

25 ("729 + 675 + 625

27 %

729

= 50725

25
2029
=> xx
= 50725
27
729
M

50725x27x729
=> x =

25x2029
.-. Each instalment = Rs 19683
The sum is to be paid back in 4 annual instalments.
.-. Each instalment will be ofRs (5600 * 4)
ie Rs 1400 together with interest on the balance for
one year
.-. Amount payable at the end of 1 st year
= Rs 1400+ 8% ofRs 5600

= Rs 1400 + Rs I

5600X

x2800

100

U00

xl400

= Rs 1400 + Rs 112 = Rs 1512

Hence the four instalments are
Rs 1848, Rs 1736, Rs 1624 and Rs 1512
The sum is to be paid back in 3 annual instalments
.-. Each instalment will be ofRs (6000 + 3), ie Rs 2000
together with interest on the balance for one year
.-. Amount payable at the end of 1 st year
= Rs 2000 + 10% ofRs 6000
' 10
-x6000
= Rs 2000 + Rs
.100
)
= Rs 2000 + Rs 600 = Rs 2600
Balance at the end of 1 st year
= Rs (6000 - 2000)=Rs 4000
.-. Amount payable at the end of 2nd year
= Rs 2000 + 10% ofRs 4000
10
^
= Rs2000 + Rs x 4 0 0 0
100

, ^
= 19683
0

_8_

= Rs 1400 + Rs 224 = Rs 1624

Balance at the end of 3rd year
= Rs(2800-1400) = Rs 1400
.-. Amount payable at the end of 4th year
= Rs 1400+ 8% ofRs 1400
Rs 1400 + Rs

x4200

100

Total principal for the three instalments

25
'25>
Rs x +
27
^27;

_8_

= Rs 1400+ Rs 336 = Rs 1736

Balance at the end of 2nd year
= Rs (4200 -1400) = Rs 2800
Amount payable at the end of 3rd year
= Rs 1400+ 8% ofRs 2800
Rs 1400 + Rs

Similarly, Principal forthe 2nd instalment

25

Balance at the end of 1st year

= Rs (5600 -1400) = Rs 4200
Amount payable at the end of 2nd year
= Rs 1400+ 8% ofRs 4200

75 "
0

= Rs 1400+ Rs 448 = Rs 1848

= Rs 2000 + Rs 400 = Rs 2400

Balance at the end of 2nd year
= Rs 4000 - Rs 2000 = Rs 2000
.-. Amount payable at the end o f 3rd year
= Rs 2000+10% ofRs 2000
10
= Rs 2000 + Rs

100

x2000

= Rs 2000 + Rs 200 = Rs 2200

Hence the three instalments are: Rs 2600, Rs 2400 and
Rs2200.

PRACTICE BOOK ON QUICKER MATHS

324
8.

The sum is to be returned in 3 annual instalments.

.-. Each instalment will be ofRs (8400 + 3), ie Rs 2800
together with interest on the balance for one year.
.-. Amount payable at the end of 1 st year

Similarly, principals for the next two instalments are

P =Rs(f]*andP =Rs(f)*
2

19
= Rs 2800 + % ofRs 8400
2

PP
l+

P =1261

'20Y

f20^
19
1
1
= Rs2800 + Rs x
x8400
2 100
J
= Rs 2800+ Rs 798 = Rs 3598
Balance at the end of 1st year
= Rs 8400 - Rs 2800 = Rs 5600
.-. Amount payable at the end o f 2nd year

Ui;

.21J

i1 + + 20
21
21J

20

21
20
>
21

19
= Rs 2800 + % ofRs 5600
2

f'20V
x + \ x = 1261
\

x+\
.21)

1261

, 20 400 ,
,
1+ +
=1261
21 441

20 r441 + 420 + 400 , , , , ,

x\
= 1261
21 I,
441
s

19
1
Rs2800 + Rs x 5 6 0 0
.200

20
1261
1261x21x441
xx
= 1261 => x =
21
441
20x1261

= Rs 2800 + Rs 532 = Rs 3332

Balance at the end of 2nd year
= Rs 5600 - Rs 2800 = Rs 2800
.-. Amount payable at the end of 3rd year
= Rs 2800 + ^ % ofRs 2800
2
19
= Rs2800 + Rs
v

200

x2800

=Rs 2800 + Rs 266 = Rs 3066

Hence, the three instalments are: Rs 3598, Rs 3332
and Rs 3066
Cash price of the tape recorder = Rs 1561
Cash down payment = Rs 300
.-. Price to be paid in instalment has its present value
= Rs 1561 -Rs300 = Rs 1261
Let each instalment be Rs x
Rate = 10% pa = 5% half yearly
.-. Principal (P) included in the 1 st instalment

rz> x =

10.

= 463.05
20
.-. Each instalment = Rs 463.05
Let each instalment be Rs x
Rate = 8% pa = 4% half yearly
.-. Principal (P ) included in the 1st instalment
x

26
Rs

= Rs

25

Similarly, principal (P ) for the next instalment

2

25: \
Rs

26y

P, + P = 2550
f25^
'25]
ie { 2 6 ;x + ^26) x = 2550

1+100

25
A= P 1+

21

1 +

26

25

26 + 25

26

26

i. ^
26

Rs

25

26A

\x = P 1 + 100
100

105
100
= Rs x + = Rs x x 100J
105
(20

26.

1+
V 100.

Rs

25^
Rs

ll
26

= 2550

= 2550

2550

Problems Based on Instalment

325

=> x = 2550x x = 1352

25 51
11.

= 665.50+ 1 +

.-. Each instalment = Rs 1352

Let each instalment be Rs x
Rate = 8% pa

10
100 J

A = P 1+100

665.50 =P\+

.*. Principal (P,) included in the 1st instalment

108
= Rs

= Rs

1+100

10 V

100 J

= 665.50 + I = 665.50 x =R 605

S

100
Principal (P ) for the second year
2

100
= Rs

25
665.50+ 1 +

108

Similarly, principal (P ) included in the 2nd instalment

10'

= 665.50 +

100

10

*^" * io io
;

25
=

= 665.50x x

n 2

2T

Principal (P ) for the third year

3

.-. P, + P = 2600

10 V
= 665.50 + 1 1 +
100

(25^
ie

12.

(25)

{21 j

x+

x = 2600

127 J

On solving this equation, you will obtain x = 1458

.-. Each annual instalment = Rs 1458
Let each annual instalment be Rs x
Rate =12.5% pa
.-. Principal (p,) included in the 1st instalment

= Rs x +
1+

12.5}

112.5 J

.-. Total principal = P +P

l

14.

1000
xx-

1125

+P

= Rs (605 + 550 +500) = Rs 1655

The yearly instalment paid at the end of 1 st year and
2nd year = Rs 1682

= 1682 +

Rs

10)

r t c cr.
10 10 10
= 665.50 x x x =Rs500

100

100,
100

Rs xx-

=665.50x

.-. Principal (P,) for the first year

112.5
= Rs

=Rs550

= Rs

i i
1 +100

8
9)

y
A = P\l +

1682 = P.\ +

100 )

16
100J

Similarly principal (P ) included in the 2nd instal2

= Rs ! 6 8 2 +
100
r

ment = Rs
P +P
x

1 1 6

\9j
=816

= Rs

1682x

f 25^

100
116

= Rsl450
Principal (P ) for the 2nd year
2

13.

On solving this equations you will get x = 486

.. Each annual instalment = Rs 486
Govind paid Rs 665.50 as the amount at the end of 1st
year, 2nd year and 3rd year.
.-. Principal (P, )for the first year

= 1682 +

JL6_

1 + 100J

1682 x

25 25
= Rs 1682x x =Rsl250

25
29.

PRACTICE BOOK ON QUICKER MATHS

326
.-. Total principal = P + P
x

= Rs 2600 +

= Rs 1450+ Rs 1250 = Rs 2700

Total amount paid = Rs (1682 * 2) = Rs 3364
.-. Total interest = Rs 3364 - Rs 2700 = Rs 664
Interest charged with first instalment

= Rs 2600 x

= Rs 2700x =Rs432
100

15.
16.

HQ

Too
100
110

= Rs 2 6 0 0 x ^

11)

Interest charged with second instalment

= Rs664-Rs432 = Rs232
See the solution of Q. No. 12.
The quarterly instalment paid at the end of 1 st, 2nd
and 3rd quarter = Rs 4630.50

10 10
Rs 2 4 0 0 x - x
=
T

1+100

4630.50 x

Rs

200000
121
26000

Similarly, principal (P ) for the 2nd quarter

:. Total principal = Rs

240000

11
f20^
= Rs 4630.50

;Rs

20 20
= Rs 4630.50 x x
21 21
Principal (P ) for the 3rd quarter

Rs4200

= Rs

'20^

18.

121

20 20 20
= Rs 4630.50 x - - x x =Rs4000
21 21 21
Total principal =

17.

P +P +P
i

2600 + 1 +

200000^1

121

121 J

286000 + 240000 + 200000

121
7260000

40

Rate= 1 3 - % pa

% pa

o/
20
% = % half-yearly
0

.-. Principal {P ) for amount x at the end of 1 st six

x

20/3''
months = Rs * "" 1 + 100
5

P = /I +
100

= Rs 6000
121
.-. The amount of loan taken = Rs 6000
Total amount paid = Rs (2600 + 2400 + 2200) = Rs 7200
Total interest paid = Rs (7200 - 6000) = Rs 1200
Let each instalment be ofRs x

= Rs (4410 +4200 + 4000) = Rs 12610

Total amount paid = Rs (4630.50 x 3) = Rs 13891.50
.-. Total interest = Rs 13891.50-Rs 12610
=Rs 1281.50
Instalment paid at the end o f 1st year = Rs 2600
.-. Principal of 1 st instalment
=

10 10 10
= Rs 2200 x x x
11 11 11

105

= Rs 4630.50

240000
R

Rs 2200 <| H

100

20
Rs 4630.50 x |

11

3rd instalment paid at the end of 3rd year = Rs 2200

.-. Principal of 3rd instalment

4630.50 +
V
100

: R s

10

.-. Principal of 2nd instalment = Rs 2400 x

-Rs

ii

2nd instalment paid at the end of 2nd year = Rs 2400

.-. Principal (P ) for the first quarter

= 4630.50-

K S

lOOj

Problems Based on Instalment

327

3rd instalment = Rs 460

.-. Principal of 3rd instalment

320 ]
300
15
= Rs x + =Rs*|^J = Rs^
300
s

1 6 ;

\3

'20Y =Rs 460x

,
20 20 20
x x

Similarly, the principal for amount x at the end of sec-

= Rs 460
23

15:\
ond six months = Rs *| ~

23

23

23

160000
= Rs

529

Principal (P )for amount x at the end of third six

3

16200
months = Rs *

.-. Total principal = Rs

15"

V, 1 6 ,

= Rs

/> + p + p, = 5407.50
2

ie

\x

J6,
'15_

05" f

06, i

f l
tiej
1 5

(HI

15407.50

256

19.

= 5407.50

= 5407.50

16A256

529

529

740600
529

740600

x = 500 +

>29

264500+740600

20.

721

+-

1005100
= 1900
529
529
.-. Cash price of the gas stove = Rs 1900
Let the cash price of the cassette recorder be Rs x
Cash down payment = Rs 450
.-. Remaining amount = Rs(x-450)
Rate = 18% pa
1st instalment paid at the end of first year = Rs 680
x=

= 5407.50

256 + 240 + 225

,16.

160000)

372600 + 208000 + 160000

740600

= Rs
529
529

JC-500 =

2"

1+ +
16 U6y

23

208000

.-. x = 5407.50 x x = 2048

15 721
.-. Each instalment = Rs 2048
Let the cash price of the gas stove be Rs x
Cash down payment = Rs 500
.-. Remaining amount = Rs (x - 500)
1 st instalment paid at the end of first year = Rs 810

15

(
18
.-. Principal of first instalment =Rs 680 + I1 +

A =P 1+

100

IOOJ

(100
=

8 0 + l i - = R s 680
100
8

118

.-. Principal of 1 st instalment = Rs 810 + ^1 +

=

A = P\\

100

810 +

100

100

'20^
= Rs 810
v23,
115;

Rs

2nd instalment = Rs 520

(20
.-. Principal of 2nd instalment = Rs 520
s

'50^
v59y

34000
Rs

59

2nd instalment at the end of 2nd year = Rs 590

:.P = A*\ +

100

= Rs 810x

Rs 680

115

16200
23

/50f
.-. Principal of second instalment = Rs 590
.59

50 50
25000
Rs 590x x = R
59 59
59
34000 25000
Total principal = Rs
59
59
c n n

59000
= Rs

20 20
= Rs 520x x = R
23 23
C

=Rs 1000

208000

x-450=1000 zz>x= 1000 + 450= 1450

529

PRACTICE BOOK ON QUICKER MATHS

328

21.

Hence, the cash price of the casette recorder is Rs

1450
Let the cash price of the colour TV be Rs x
Cash down payment = Rs 2000
.-. Remaining amount = Rs (x - 2000)
Rate = 10% pa
1 st instalment paid at the end of first year = Rs 1800

.-. Remaining amount = R s ( x - 240)

1 st instalment at the end of first year = Rs 380
25

,\l of 1 st instalment = 380 + 1 1 +

100

r V
:.P = A + 1 +
100 J
IOOJ

A = P\ +

.-. Principal of first instalment =Rs 1800+ 1 +

r }

ft

A=P 1+

R s

100

. (
r Y"
:P = A + \ +
n

100,

Rs

110;

=R

1800^

.;. Principal of 2nd instalment = Rs 1560

'io^

10 10
156000
= R s l 5 6 0 * x =Rs
121
3rd instalment paid at the end of third year = Rs 1430

fioV
.-. Principal of 3rd instalment = Rs 14301
. . . . 10 10 10
130000
= Rs 1430x x x = R
11 11 11
121
.-. Total principal of the three instalments
S

= Rs
= Rs

22.

156000
+

21

130000^1
'

121

198000 + 156000 + 130000

121
484000

100

\125

u
= Rs380

= Rs304

-
16
Rs 2 4 0 x = r
25
3rd instalment at the end of 3rd year = Rs 200
.-. Principal of 3rd instalment

18000

11

100,

=Rs4000

x- 2000 = 4000 => x = 2000 + 4000 = 6000

.-. The cash price of the colour TV = Rs 6000
Amount paid in instalment plan
= Rs (2000 + 1800 +1560 + 1430) = Rs 6790
.-. Total interest paid = Rs 6790 - Rs 6000 = Rs 790.
Let the cash price of the sewing machine be Rs x
Cash down payment = Rs 240

= Rs 200
_

768

= Rs 240

100

'18000

125"

2nd instalment at the end of 2nd year = Rs 240

.-. Principal of 2nd instalment

11
2nd instalment paid at the end of 2nd year = Rs 1560

= Rs

Rs 380

IOOJ _

[l800+i!
100

= Rs 1800x

Rs 380 +

4 4 4
= Rs 200x x-^x
5 5 5

512

The total principal of the three instalments

( . . . 768 512
= Rs 304 + +
_
'1520 + 768 + 512^
- Rs V
5
j
2800
= Rs r =Rs560
.-. x-240 = 560 =>x =560 + 240 = 800
.-. Cash price of the sewing machine = Rs 800
Total amount paid = Rs (240 + 380+240 + 200)
= Rsl060
.-. Total interest paid = Rs 1060 - Rs 800 = Rs 260
Case 3: Instalments to pay off debt
Suppose borrower is to pay a sum ofRs P due after
T years, but he wants to pay through equal instalments at an
agreed interval (may be quarterly, monthly, half-yearly or
yearly) to discharge off his debt in T years. Hence, through
equal instalment payments, the debt ofRs P due in T years is
cleared in T years.
Then,
n(n-\)
A = nx + xr
lOOw

3:;

Problems Based on Instalment

Where A = amount due after T years
n = number of instalments to be actually paid to discharge the debt,
r = rate per cent per annum charged on simple interest
m = number of instalments per year,
= 1, if yearly instalment is paid.
= 4, if quarterly instalment is paid.
= 2, if half yearly instalment is paid,
= 12, i f monthly instalment is paid,
x = amount of each instalment in Rs.
Note: Also see Type 3 of Case I.

3.

100x4
106

c)16j%

d)33i%

A sum ofRs 10 is lent out to be returned in 11 monthly

instalments of Re 1 each, interest being simple. The rate
of interest is
.
b) 11%

c)9^-%

d) 2 1 - ^ %

Answers
1. a;

Ex:

8480 = Ax +

2 2

a) 10%

Illustrative Example
A man borrows a sum of money at 16% per annum
simple interest, promising to pay Rs 8480 after a year
from the date of borrowing. I f he wants to discharge
the debt by paying four equal quarterly instalments,
how much should be each instalment.
Soln: Applying the above formula, we have

b) f

a)26|%

Hint: Applying the given rule, we have

A = Rs2,x = R e l , n = 3,m= 12
or, 2 = 3x1 +

fxl

100x12
2. a;

or, r = 400% *. the rate per cent per annum = 400%

Hint: Applying the given rule, we have,
lxr
9 = 10x1 + 100x12

x [ : m = 4 (quarterly^
2

3x2

10x(l0-l)

15r
or, " T T T = - 1 [we omit the -ve sign]
400

8480 => x = /?s 2000

25 '
400

Exercise
1.

2.

A sum ofRs 2 is lent to be paid back in 3 equal monthly

instalments of Re 1 each. Find the rate per cent.
a) 400%
b)140%
c)340%
d)40%
A money lender lends out Rs 9 on the condition that the
loan is payable in 10 months in 10 equal instalments of
Re 1 each. Find the rate per cent per annum.

80
2
= = 26%
15
3
3

. r=
3d-

IA

,,

Hint: 10 = 11x1 +
x
mm.
100x12

>

240 , 9 ,
_ = 21 %.

Hx(ll-l)

i
2

'-