 Hello and welcome to the session. Let's work out the following problem. It says a television set is available for Rs 20,000 cash or Rs 5,000 cash down payment followed by 6 equal annual installments. The first to be paid one year after the date of purchase. If the rate of interest under the installment plan is 10% for NM, determine the amount of installment. So let's now move on to the solution. Now the cash price of television is Rs 20,000 and the cash down payment is Rs 5,000. So the balance due will be Rs 20,000 minus 5,000 so this is equal to Rs 15,000. Now the number of installments is equal to 6 and the rate of interest I is 10% that is 10 by 100 and balance due becomes the principle P. Now if R is the present value of the annuity then P principle is given by R into 1 plus 1 plus I to the power minus N upon I where I is the rate of interest N is the number of installments. Let's now substitute all these values. P is the principle we have to find R into 1 plus 1 plus 0.1 to the power minus 6 upon 0.1 so we have 15,000 into 0.1 is equal to R into 1 plus 1.1 to the power minus 6 upon 0.1 minus 6 so this implies R is equal to 1500 upon 1 plus 1.1 to the power minus 6 is given as 0.5644 so it is 1 plus 0.5644 so this is equal to 1500 upon here we have minus so here also we need to change so 1 minus 0.5644 is equal to 0.4356 and dividing 1500 by 0.456 we have value of R as 3443.53 therefore required amount of each instalment is equal to rupees 3400 and 43.53 so this completes the question and the session. Just remember this formula so bye for now take care have a good day.