A car with a price of Rs. 6,50,000 is bought by making some down payment. On the balance, a simple interest of 10% is charged in lump sum and the money is to be paid in 20 equal annual instalments of Rs. 25,000. How much is the down payment?

A. Rs. 1,55,945

B. Rs. 1,95,455

C. Rs. 1,94,555

D. Rs. 1,45,955

Answer: Option B

Solution (By Examveda Team)

Cash payment = 650000
Each installment = 25000
Total installment = 20
Sum = 25000 × 20 = 500000
Rate = 10% = $$\frac{1}{{10}}$$

⇒ Down payment = 650000 - 454545.45 = 195454.55 ≈ 195455