Money paid in cash = Rs. 1000.

Balance payment = Rs. (20000 – 1000) = Rs. 19000.

To find the value of the last installment covering the interest as well, we need to use the concept of simple interest and equated installments.

Given:

Principal amount (P) = Rs. 20,000

Number of installments (n) = 20

Value of each installment (E) = Rs. 1000

Rate of interest (R) = 6% per annum

We can find the total amount paid by the customer over the 20 installments by multiplying the value of each installment by the number of installments. This gives:

Total amount paid = E x n = Rs. 1000 x 20 = Rs. 20,000

However, this only covers the principal amount. To find the total amount paid with interest, we need to add the interest to the principal. We can use the formula for simple interest to calculate the interest:

Simple interest (I) = (P x R x t)/100

where t is the time in years. In this case, the time is 1 year, since the interest is charged for the first year of the installment plan.

Substituting the given values, we get:

I = (20,000 x 6 x 1)/100 = Rs. 1200

Therefore, the total amount paid with interest is:

Total amount = P + I = Rs. 20,000 + Rs. 1200 = Rs. 21,200

To find the value of the last installment covering the interest as well, we can subtract the sum of the first 19 installments from the total amount. The sum of the first 19 installments is:

Sum of first 19 installments = E x (n-1) = Rs. 1000 x 19 = Rs. 19,000

Therefore, the value of the last installment covering the interest as well is:

Last installment = Total amount - Sum of first 19 installments = Rs. 21,200 - Rs. 19,000 = Rs. 2,200

Hence, the correct answer is option E.

If you think the solution is wrong then please provide your own solution below in the comments section .