A farmer buys a used for ₹180000. He pays ₹90000 in cash and agrees to pay the balance in annual instalments of ₹9000 plus 12% interest on the unpaid amount. How much did the tractor cost him?

-

Given: -


The amount that is to be paid to buy a tractor = ₹180000.


An amount that he paid by cash = ₹90000.


Remaining balance = ₹90000


Annual instalment = ₹9000 + interest @12% on unpaid amount.



UNPAID AMOUNT



Interest on the unpaid amount



Amount of the instalment



1st instalment



90000



=



= 9000 + 10800 = 19800



2nd instalment



81000





= 9000 + 9720 = 18720



Thus, our instalments are 19800, 18720, 17640…….


Total number of instalments =


=


= 10


So our instalments are 19800, 18720, 17640 ... upto 10 terms.


All our instalments are in A.P with a common difference d.


Here


First term(a) = 19800


Common difference = d = 18720 - 19800


d = - 1080


Number of terms is 10


Sum of all instalments



= 149400


Hence,


The total cost of the scooter = amount that is paid earlier + amount paid in 10 instalments.


= 90000 + 149400


The total cost paid by the farmer = ₹239400


1