Question

A television is available for Rs 7500 cash or Rs 3000 cash down payment folowed by five equal monthly instalments of Rs 1000 each find the rate of interest per annum charged under the instalment plan

Answer 1

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Answer 2

Answer:

Rate = 16% per annum

Step-by-step explanation:

Cost Price of television = Rs. 7500

Cash to be paid at time of purchase = Rs. 3000

Monthly installment of 5 months = Rs. 1000

Cost Price of television Under installment procedure = 3000 + 5 × 1000

                                                                                         = Rs. 8000

Interest = 8000 - 7500

             = Rs. 500

Time = 5 months

$Time = \frac{5}{12}=0.42\text{ years}$

Principal = Rs. 7500

Simple Interest = Principal × Rate × Time

⇒ 500 = 7500 × Rate × 0.42

⇒ 500 = Rate × 3125

⇒ Rate = 0.16

⇒ Rate = 0.16 × 100 = 16% per annum