Question 14 Marks
A farmer buys a used tractor for ₹ 12000. He pays ₹ 6000 cash and agrees to pay the balance in annual instalments of ₹ 500 plus 12% interest on the unpaid amount. How much the tractor cost him?
Answer
View full question & answer→Total cost of tractor $=6000+[(500+12\%\ \text{of}\ 1\ \text{year})\\+(500+12\%\ \text{of}\ 5500\ 1\text{year})+\ .....\ +12\ \text{times}]$ $=6000+6000+\frac{12}{100}(6000+5500+\ .....\ +12\ \text{times})$ $=12000+\frac{12}{100}\big[\frac{12}{100}(6000+5000)\big]$ $=12000+\frac{12}{100}\times\frac{12}{2}\times6500$ $=12000+(72\times65)$ $=12000+4680$ $=16680$ Total cost of tractor $=₹\ 16680$