A man buys a scooter on making a cash down payment of ₹

A man buys a scooter on making a cash down payment of ₹ 16224 and promises to pay two more yearly instalments of equivalent amount in next two years. If the rate of interest is 4% per annum, compounded yearly, the cash value of the scooter, is

Let principal (present worth) for first year be P₁ and that for two years be P₂.

∴ 16224 = P₁		1 +	4
			100

⇒ 16224 = P₁		1 +	1		=	26P₁
			25			25

⇒ P₁ =	16224 × 25	= ₹ 15600
	26

Again,

16224 = P₂		1 +	4		₂
			100

⇒ 16224 = P₂		26		₂	=	676P₂
		25				625

⇒ P₂ =	16224 × 625	= ₹ 15000
	676

∴ Cash value of the scooter = ₹ (16224 + 15600 + 15000) = ₹ 46824