Melanie wants to sell her phone. there are two offers, one at inr 12000 cash and the other a credit of inr 12880 to be paid after 8 months, money being at 18% per annum. which is the better offer?
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The correct answer is - to pay the amount 12000/- in cash.
If the amount is paid in cash right away, there will be no fear of any discount or fear of fall in the principal amount or the present worth (P.W).
If, the Rs. 12,800/- is paid after 8 months at an annual money of 18%, then there is a chance that the present worth may fall due to the true discount.
So, = [Rs. 12,880 x 100 / 100 + (18 x 8/12)] = [Rs. 12,880 x 100 / 112] = Rs. 11,500.
So, due to the true discount, the worth may fall to Rs. 11,500.
If the amount is paid in cash right away, there will be no fear of any discount or fear of fall in the principal amount or the present worth (P.W).
If, the Rs. 12,800/- is paid after 8 months at an annual money of 18%, then there is a chance that the present worth may fall due to the true discount.
So, = [Rs. 12,880 x 100 / 100 + (18 x 8/12)] = [Rs. 12,880 x 100 / 112] = Rs. 11,500.
So, due to the true discount, the worth may fall to Rs. 11,500.
Answered by
0
12000 is your anSwer.....
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