Question

A washing machine is available for Rs.13,500 cash or Rs.6,500 as cash down payment followed by three monthly instalments of Rs.2,500 each. Find the rate of interest charged under instalment plan.​

Answer 1

Cash price of washing machine = Rs. 13500

Cash down payment = Rs. 6500

Balance due = Rs(13500 – 6500) = rs. 7000

No. of equal instalments = 3

Amount of each instalment =rs. 2500

Amount paid in installment = Rs. 7500

Therefore, interest paid in installment scheme = rs(7500-7000) = rs. 500

Principal for the 1stmonth = Rs. 7000

Principal for the 2ndmonth = Rs. 4500

Principal for the 3rdmonth = Rs. 2000

Total = Rs. 13500

Let the rate of interest be r% per annum

I = p*r*1 / 1200

Then, I = 13500*r*1 / 100*12

=> 500 =13500*r*1 / 100*12

=>r = 500*12/ 135

=>r = 44.4 %

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