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 A State Government announces sale of flats of Rs 555000 cash or Rs 42750 cash down payment and 3 equal Yearly installments. The Government also charges a nominal interest at the rate of 8 % per annum copuounded as installment plan in this welfare scheme.Solution:Your problem -> A State Government announces sale of flats of Rs 555000 cash or Rs 42750 cash down payment and 3 equal Yearly installments. The Government also charges a nominal interest at the rate of 8 % per annum copuounded as installment plan in this welfare scheme. Cash Price = 555000Down Payemnt = 42750No of Installment = 3Rate = 8Remaining Balance = 555000 - 42750 = 512250 Let Installment = X Now present value of amount of X Rs paid at the end of 1st Year  = X / ( 1 + 8/100 ) = X × 25/27Similarly, for 2^(nd) Year = X × (25/27)^2Similarly, for 3^(rd) Year = X × (25/27)^3:. The total of the present values of the 3 Installment is Rs ( X × 25/27 + X × (25/27)^2 + X × (25/27)^3 )and this must be equal to 512250:. ( X × 25/27 + X × (25/27)^2 + X × (25/27)^3 ) = 512250:. X ( 36978525/14348907 ) = 512250X = 7350227610750/36978525:. Installment Amount = 7350227610750/36978525Total Amount Paid = 7350227610750/36978525 × 3 = 22050682832250/36978525Interest = Total Paid - Balance Amount = 22050682832250/36978525 - 512250 = 3108433401000/36978525

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