A car with a price of ₹6,50,000 is bought by making some down payment. On the balance, a simple interest of 10% is charged in lump sum and the money is to be paid in 20 equal annual installments of ₹25,000. How much is the down payment?
Answer & explanation
Correct answer: option 2
Let R is the amount of required down payment.
ATQ,
(650000 - R) × ( 1 + \(\frac{10}{100}\) ) = 20 × 25000
( 650000 - R) = 20 × 25000× \(\frac{10}{11}\)
650000- R = 454545(approx)
∴ R = 65000 - 454545 = Rs.1,95,455/-