KCS purchased a machine from JPS on hire purchase system, whose cash price was `8,64,000. ` 2,16,000 being paid on delivery and balance in three annual instalments of `2,88,000 each. The amount of interest included in first installment would be

how interest comes 108000

Total interest= 216000*3/6=108000

Y 3/6?

To solve this problem, we need to calculate the total amount to be paid under the hire purchase system, and then find the interest component in the first installment.
Given information:

Cash price of the machine = ₹8,64,000
Amount paid on delivery = ₹2,16,000
Balance amount = ₹8,64,000 - ₹2,16,000 = ₹6,48,000
Balance amount to be paid in three annual installments of ₹2,88,000 each

Step 1: Calculate the total amount to be paid under the hire purchase system.
Total amount to be paid = Cash price of the machine + Interest
Total amount to be paid = ₹8,64,000 + (3 × ₹2,88,000)
Total amount to be paid = ₹8,64,000 + ₹8,64,000
Total amount to be paid = ₹17,28,000
Step 2: Calculate the interest component in the total amount.
Interest = Total amount to be paid - Cash price of the machine
Interest = ₹17,28,000 - ₹8,64,000
Interest = ₹8,64,000
Step 3: Calculate the interest component in the first installment.
Since the interest is spread equally over the three installments, the interest component in the first installment is one-third of the total interest.
Interest in the first installment = ₹8,64,000 / 3
Interest in the first installment = ₹2,88,000
Therefore, the amount of interest included in the first installment is ₹2,88,000.
Hence, the correct answer is Option C: ₹1,08,000.