It is not possible for everyone to buy medium to high priced items required for essentials or comforts of day-to-day life by outright purchase. Hence, it is necessary to understand the concepts of meeting such financial requirements by way of loans from banks or shops and pay the costs in easy instalments.
Let us say, if an item costs $ 5000 and you had only $ 1000 with you in cash then what would be the amount you have to pay over a period of time so that you can take the item home and start using it immediately. We normally hear of EMIs i.e. Equated Monthly Instalments.
This lecture gives an insight into the way the system of financing through loan works. For ease of understanding, the lecture is made out in two parts. First part is based on Simple Interest and the second part (to be published shortly) is based on Compound Interest.
Real life situations have been cited as examples for easy comprehension and at the end of the lecture unsolved problems have been given for better learning through self study. It is useful as part of Math, Word Problems, Applied Math activity.