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| 1. | 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» Given: Price of the tractor is ₹12000. We need to find the total cost of the tractor if he buys it in installments. Total price = ₹ 12000 Paid amount = ₹ 6000 Unpaid amount = ₹ 12000 – 6000 = ₹ 6000 He pays remaining ₹ 6000 in ‘n’ number of installments of ₹ 500 each. So, n = 6000/500 = 12 Cost incurred by him to pay remaining 6000 is The AP will be: (500 + 12% of 6000) + (500 + 12% of 5500) + … up to 12 terms 500 × 12 + 12% of (6000 + 5500 + … up to 12 terms) By using the formula, Sn = n/2 [2a + (n – 1)d] n = 12, a = 6000, d = -500 S12 = 500×12 + 12/100 × 12/2 [2(6000) + (12 - 1) (-500)] = 6000 + 72/100 [12000 + 11 (-500)] = 6000 + 72/100 [12000 – 5500] = 6000 + 72/100 [6500] = 6000 + 4680 = 10680 Total cost = 6000 + 10680 = 16680 ∴ The total cost of the tractor if he buys it in installment is ₹ 16680. | |