5. A scooter can be purchased for rupees 28000 cash or for 7400 as cash down payment
followed by 4 equal monthly instalments of 5200 each. Find the rate of interest
charged under instalment plan.
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Step-by-step explanation:
Cash price of the scooter=Rs.28,000
Cash down payment=Rs.7,400
Balance price to be paid the instalments=Rs.28,000−7,400
=Rs.20,600
Amount paid in 3 equal monthly instalment=7,000×3
=21,000
Total payment=7,400+21,000
=28,400
Interest paid in instalment scheme=28,400−28,000
=400
Principal amount for the 1st month =Rs.20,600
Principal amount for the 2nd month =20,600−7,000=Rs.13,600
Principal amount for the 3rd month =13,600−7,000=Rs.40,800
Rate if interest=
40,800×1
400×100×12
=11.76%
Thus, the rate of interest charged under instalment scheme is 11.76%.
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