Neeraj buys a bike on making a cashdown payment of Rs. 17,496 and promises to pay two more yearly installments

Neeraj buys a bike on making a cashdown payment of Rs. 17,496 and promises to pay two more yearly installments of equivalent amount in next two years. If the rate of interest is 8% per annum compounded yearly, the cash value of the bike is (in Rs.):

(a) Rs. 45,676

(b) Rs. 48,696

(c) Rs. 50,676

(d) Rs. 52,696

Sol:

⇒ P₂ = Rs. 15,000

∴ cash value = Rs. 17,496 + Rs. 15,000 + Rs. 16,200

= Rs. 48696