The price of a tv set worth rs 20000

Answer:

An easy way to understand as well as to solve such a problem is as under:

We are assuming the interest is simple interest - there is no interest on interest.

The amount of Rs 20000 is paid in 20 instalments of Rs 1000 each. As and when an instalment is being paid, we shall calculate the interest due on that instalment based on the number of months that amount has been with the buyer.

Note that the interest rate is 6% per annum or 0.5% per month.

The first instalment is paid at the time of purchase - so this amount has been with the purchaser for 0 months. So no interest is due on this amount.

The first instalment is paid after 1 month - so this amount has been with the purchaser for 1 month. So an interest for 1 month is due on this amount of Rs 1000.

The second instalment is paid after 2 months - so this amount has been with the purchaser for 2 months. So an interest for 2 months is due on this amount of Rs 1000.

The nth instalment is paid after n-1 months - so this amount has been with the purchaser for n-1 month. So an interest for n-1 months is due on this amount of Rs 1000.

The last instalment is paid after 19 months - so this amount has been with the purchaser for 19 month. So an interest for 19 months is due on this amount of Rs 1000.

Note that the principal amount is Rs 1000 in each case and since we are talking of the period in terms of months the interest is considered as 0.5% per month.

The total number of months for which interest is to be paid (every time on a principal of Rs 1000) is 1 + 2 + 3 + …….. + 19 = 19 x 20 / 2 = 190.

So the interest to be paid is 1000 x 190 x 0.5 / 1000 = Rs 950.

So, the amount to be paid as the last instalment, including the interest is Rs 1000 + Rs 950 = Rs 1950.

Step-by-step explanation: