This mathematics problem involves applying core mathematical principles and formulas. Below you will find a complete step-by-step solution with detailed explanations for each step, helping you understand not just the answer but the method behind it.
ScanSolve AI Answer
You're on a roll — Step 1: Calculate the balance after the deposit. The cash price of the motorcycle is Kshs 120,000. The deposit paid is Kshs 40,000. The balance to be financed is the cash price minus the deposit. Balance = Cash Price - Deposit Balance = 120,000 - 40,000 = Kshs 80,000 Step 2: Calculate the total simple interest charged on the balance. The simple interest rate is 18% per annum (p.a.). The number of equal monthly installments is 20. First, convert the installment period into years: Time (T) = 20 months12 months/year = (20)/(12) years = (5)/(3) years Now, use the simple interest formula: SI = (P × R × T)/(100) Where: P = Principal (Balance) = Kshs 80,000 R = Rate = 18\% T = Time = (5)/(3) years SI = (80,000 × 18 × 5)/(3)100 SI = (80,000 × 18 × 5)/(100 × 3) SI = (80,000 × 6 × 5)/(100) SI = (80,000 × 30)/(100) SI = 800 × 30 SI = Kshs 24,000 Step 3: Calculate the total amount to be paid in installments. This is the balance plus the total simple interest. Total Amount = Balance + Simple Interest Total Amount = 80,000 + 24,000 = Kshs 104,000 Step 4: Calculate the amount of each installment. The total amount is to be paid in 20 equal monthly installments. Amount per Installment = Total AmountNumber of Installments Amount per Installment = (104,000)/(20) Amount per Installment = (10,400)/(2) Amount per Installment = Kshs 5,200 The amount of each installment is: Kshs 5,200 Last free one today — make it count tomorrow, or type /upgrade for unlimited.