# Initial Cost and Installments

• Sep 7th 2011, 03:03 AM
haftakhan
Initial Cost and Installments
A bought 2 rings at euro 299 each and a watch at euro 140. 1/6 of total cost was paid at the time of purchase and balance in 12 equal installments. What was the amount of each months payment ?

Answer is \$61.50 but how. It comes only if 1/6 is neglected at first but why should it be neglected ?
• Sep 7th 2011, 03:12 AM
alexmahone
re: Initial Cost and Installments
Quote:

Originally Posted by haftakhan
A bought 2 rings at euro 299 each and a watch at euro 140. 1/6 of total cost was paid at the time of purchase and balance in 12 equal installments. What was the amount of each months payment ?

Answer is \$61.50 but how. It comes only if 1/6 is neglected at first but why should it be neglected ?

Total cost = 2*299 + 140 = 738

Balance = 5/6 * 738 = 615

Each month's payment = 615/12 = 51.25
• Sep 7th 2011, 03:13 AM
haftakhan
re: Initial Cost and Installments
Yes thats the way it should be but the answer to the question is \$61.50
• Sep 7th 2011, 03:15 AM
alexmahone
re: Initial Cost and Installments
Quote:

Originally Posted by haftakhan
Yes thats the way it should be but the answer to the question is \$61.50

Then your textbook (?) is wrong.
• Sep 7th 2011, 03:20 AM
haftakhan
re: Initial Cost and Installments
Quote:

Originally Posted by alexmahone
Then your textbook (?) is wrong.

May be