MAT112 BUSINESS MATHEMATICS
CHAPTER 6 (INSTALMENT PURCHASED)
1. Ga Een bought a flat television with a 10% down payment. He was charged a 2.1%
interest based on the original balance. If he has to pay RM318.90 per month for 3 years,
find
i) the cash price of the television [RM12,000]
𝐁+𝐈
R=
𝐧
𝐁+𝟎.𝟎𝟔𝟑𝐁
318.90= 𝟑𝟔
11,480.40=1.063B
B=RM10,800
B=CP-DP
CP=10,800-0.1CP
0.9CP=10,800
CP=RM12,000
ii) the interest charged on him [RM680.40]
I=Brt
=10,800(0.021)(3)
=RM680.40
iii) the amount of the outstanding balance just after the 20th payment using Rule of 78
[RM4963.46]
(Q3(c) Oct 2012)
𝐤(𝐤+𝟏)
OPB=Rk - 𝐧(𝐧+𝟏)I
𝟏𝟔(𝟏𝟕)
= 318.90(16)- 𝟑𝟔(𝟑𝟕)(680.40)
=5102.40 – 138.94
=RM4,963.46
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2. A series of magazines was purchased by making a down payment of RM100 and 10
monthly payments of RM121.50. If the interest charged was 1.5% based on the original
balance, find
i) the installment price of the magazines [RM1315]
𝐁+𝟎.𝟎𝟏𝟐𝟓𝐁
121.50= 𝟏𝟎
1215=1.0125B
B=RM1,200
𝟏𝟎
I=1200(0.015)(𝟏𝟐)
=RM15
IP=1,200+100+15
=RM1,315
ii) the cash price of the magazines [RM1300]
B=CP-DP
1,200=CP-100
CP=RM1,300
iii) the amount of outstanding balance just after the 8th payment using the Rule of 78.
[RM242.18]
(Q3(b) March 2012)
𝟐(𝟑)
OPB=121.5(2) - (15)
𝟏𝟎(𝟏𝟏)
=RM242.18
3. Farid bought a plasma television at RM4,500 using a installment payments. He paid 20%
for the down payment and the balance was settled by making 24 monthly installments. If
the interest charged was 4.75% per annum on the original balance, find:
i) The total interest charged
B=4500-(4500×0.2)
=RM3,600
I=3600(0.0475)(2)
=RM342
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ii) The monthly payment
𝟑𝟔𝟎𝟎+𝟑𝟒𝟐
R=
𝟐𝟒
=RM164.25
iii) The installment price
IP=3600+900+342
=RM4,842
iv) The outstanding balance if he decided to settle the balance immediately after making
the 12th payment using Rule of 78.
(Q1(c) April2011)
𝟏𝟐(𝟏𝟑)
OPB=164.25(12) - 𝟐𝟒(𝟐𝟓)(342)
=RM1882.08
4. Ahmad bought a set of sofa and paid RM200 as a down payment. The balance was to be
paid by monthly payments of RM150 for two years. The interest rate was charged 10%
per annum based on the original balance. Find:
i) the amount of the loan. (RM3000)
𝐁+𝟎.𝟐𝐁
150= 𝟐𝟒
B=RM3,000
ii) the cash price.(RM3200)
CP=3000+200
=RM3,200
iii) the amount he has to pay immediately after the 20th payment, if he decides to settle
all the outstanding debts. Use the Rule of 78.(RM580)
(Q1(b) Oct2010)
I=3000(0.1)(2)
=RM600
𝟒(𝟓)
OPB=150(4) - 𝟐𝟒(𝟐𝟓)(600)
=RM580
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5. Winnie bought a brand new car that costs RM70000. She paid 10% down payment
followed by monthly payments for 7 years. Using the constant ratio formula, calculate the
monthly payment if the interest rate is 4% on reducing balance. (RM856.25)
(Q3(c) apr2010)
[𝟕𝟎𝟎𝟎𝟎−𝟕𝟎𝟎𝟎𝟎(𝟎.𝟏)](𝟖𝟓)(𝟎.𝟎𝟒)
I= 𝟐(𝟏𝟐)
=RM8,925
𝟔𝟑𝟎𝟎𝟎+𝟖𝟗𝟐𝟓
R=
𝟖𝟒
=RM856.25
6. Muniandy borrowed RM7000 from a friend. He agreed to pay RM300 monthly for 30
months. Calculate the outstanding principal balance if he decided to settle the balance
immediately after making the 18th payment using the Rule of 78. (RM 3264.52)
(Q3(d) apr2010)
I=300(30)-7000
=RM2,000
𝟏𝟐(𝟏𝟑)
OPB=300(12) - (2000)
𝟑𝟎(𝟑𝟏)
=RM3,264.52
7. A total interest of RM308.33 was charged when Saiful purchased a second hand
motorcycle at the interest rate of 8% based on reducing balance. The cash price of the
motorcycle was RM2,500. Using the constant ratio method, calculate the term of the
loan if Saiful had to pay monthly.(3 years)
(Q3(b) oct2009)
𝟐𝟓𝟎𝟎(𝐧+𝟏)(𝟎.𝟎𝟖)
308.33=
𝟐(𝟏𝟐)
7399.92=2500(n+1)(0.08)
2.959968=n+1(0.08)
36.9996=n+1
35.9996=n
n=35.9996÷12
=3 years
(Q3(b) oct2006)
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