Chapter 13

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
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
.-. 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 6th month = Rs430-Rs80 = Rs350
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
Total amount paid in 8 monthly instalments
= Rs(1600x8) = Rsl2800
Total amount paid under instalment plan
= Rs 17500 + Rs 12800 = Rs 30300
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
Rs 7700-Rs 1600
Rs6100
Rs6100-Rsl600
Rs4500
Rs 4500-Rs 1600
Rs2900
Rs 2900-Rs 1600
Rsl300
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.
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
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
311
.-. 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:>
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
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.

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.
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

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

Balance to be paid = Rs 180 - Rs 70 = Rs 110
Monthly instalment = Rs 60
.-. Amount paid in 2 equal monthly instalments Rs
(60x2) = Rsl20
Principal for 1 st month = Rs 110
Total Principal for 1 month = Rs 160
Answers
1.
Cash price of the electric iron = Rs 110

Balance to be paid after 1 month
= R s l l O - R s 5 0 = Rs60
.-. 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
.-. Amount paid in 2 equal monthly instalments
= Rs(130x2) = Rs260
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
.-. Amount paid in 6 equal monthly instalments = Rs
(225x6) = Rsl350
Principal for 1st month = Rs 1200
Total principal for 1 month = Rs 3825
Thus, Rs 150 is the interest on Rs 3 825 for 1 month or
12
year

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

(200x4) = Rs800
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

.-. Balance to be paid = Rs 180 - Rs 40 = Rs 140
= Rs(30x5) = Rsl50
.-. Interest charged = Rs 150-Rs 140 = Rs 10
^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
(300x6)= 1800
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
.-. Balance to be paid = Rs 2575 - R s 1000 = Rs 1575
= R s ( 3 0 0 6 ) = Rsl800
.. Interest charged = Rs 1800 - Rs 1575 = Rs 225
Principal for 2nd month = Rsl575-Rs300 = Rsl275
x
12
year
7?:
12
7x100
7x100
PxT
225x100
4950 x
12
14
225x100x12
600
Hence, the rate of interest is 41.67% pa

(iv) Cash price of the tape recorder = Rs 1600
Balance to be paid = Rs 1600-Rs 300 = Rs 1300
Amount paid in 8 equal monthly instalments = Rs
(175 x8) = Rs 1400
.-. Interest charged = Rs 1400-Rs 1300 = Rs 100
Principal for 2nd month = Rs 1300-Rs 175 = Rs 1125
Principal for 3rd month = Rs 1125- Rs 175 = Rs950
Principal for 8th month = Rs250-Rsl75 = Rs75
= 54.55
4950x1
11
Hence the rate of interest is 54.55% pa
(ii) Cash price of the refrigerator = Rs 3580
.-. Balance to be paid = Rs 2080
(440x5) = Rs2200
^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
(280 x 10) = Rs2800
Principal for6th month = Rs 1280-Rs280 = Rs 1000
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
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
315

3
^
x x x48
3x
28*
12
Rs x +
= Rs x +
= Rs
100
25 J
25
J
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.

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
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;
Ex:
0 /
430
= Rs4500.
:Relx!K
11
e^
11
100 J

P = Ix
100x12900
= Rs 3000
430
100x12900
5x4(4-1)
100x4 +
100
10
10
17
Similarly, the principal of 2nd instalment

5. b;

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

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
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
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 + /?,
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
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
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
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
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
= 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
= 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

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
320
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
.-. 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
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

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
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
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
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
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
= 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

= 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
= Rs 1400+ 8% ofRs 4200
75 "
0
= Rs 1400+ Rs 448 = Rs 1848
= Rs 2000 + Rs 400 = Rs 2400

= 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.
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.
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

= 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
.-. Price to be paid in instalment has its present value
= Rs 1561 -Rs300 = Rs 1261
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
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
325
=> x = 2550x x = 1352

25 51
11.
= 665.50+ 1 +

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.
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
327
3rd instalment = Rs 460

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
.-. 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
Let the cash price of the gas stove be Rs x
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
328
21.
Hence, the cash price of the casette recorder is Rs

1450
Let the cash price of the colour TV be Rs x
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
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
= 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:;

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%
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
'-

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Problems Based on Instalment

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

PRACTICE BOOK ON QUICKER MATHS

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

Hence the rate of interest is 6.5%

Hence the rate of interest is 15%

Problems Based on Instalment

2nd instalment of Rs x will amount to

2nd instalment of Rs x will amount to

llx + 16x + 15x

51* + 50* + 49x + 48*

. Total amount payable under instalment plan

Total amount of 4 instalments at the end of 4th

3rd instalment of Rs x will amount to

4th instalment of Rs x will amount to

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

Hence the monthly instalment = Rs 130.

From (i) and (ii), we get

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

PRACTICE BOOK ON QUICKER MATHS

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

Principal for 1 st month - Rs 240

Cash price of the pressure cooker = Rs 180

Cash price of the electric iron = Rs 110

Problems Based on Instalment

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 price of the watch = Rs 180

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

Hence, the rate of interest is 30% pa

PRACTICE BOOK ON QUICKER MATHS

Hence, the rate of interest is 41.67% pa

Hence the rate of interest is 24% pa

Hence, the rate of interest charged is 21.8% pa

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

Problems Based on Instalment

2nd instalment of Rs x will amount to

The amount of Rs P in 2 years at 5%

5th instalment of Rs * will amount to

Total amount of 5 instalments at the end of 5 months

From (i) and (ii), we get

What annual payment will discharge a debt of Rs 770

These four amounts together with the last annual

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

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

What annual instalment will discharge a debt of Rs 2210

Hint: Required annual payment

PRACTICE BOOK ON QUICKER MATHS

Hint: Here instalment is quarterly. Hence from the

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

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

Hint: Required answer

Similarly, the principal of 2nd instalment

Hint: Required answer

Total of the three principals

1210 + 1100 + 1000 3310

Hint: Required answer

The principal of 3rd instalment

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

Case - 2: Based on Compound Interest

When the principal is Rs

.-. Principal (P ) of the first instalment