Question : A car priced INR 6,50,000 is bought by making a down payment. On the balance, a simple interest of 10% is charged in a lump sum and the money is to be paid in 20 equal annual instalments of INR 25,000. How much is the down payment?
Option 1: INR 1,55,945
Option 2: INR 1,95,455
Option 3: INR 1,94,555
Option 4: INR 1,45,955
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Correct Answer: INR 1,95,455
Solution :
Let the downpayment be of INR $x$.
Hence from the above data, we get the following relation,
$(650000 - x)\times (1 + \frac{10}{100}) = 20\times 25000$
$⇒650000 - x = 20\times 25000 \times \frac{10}{11} ≈ 454545$
$⇒x = 650000 - 454545 = 1,95,455$
$⇒x ≈ 195455$
∴ The downpayment was INR 1,95,455.
Hence, the correct answer is INR 1,95,455.
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