Question
A clock is sold for ₹550 cash or in the instalment
scheme, for ₹250 cash down payment and ₹310 after one month. Find the rate of interest charged in the instalment scheme.Solution
Principal (P) = ₹550 - ₹250 = ₹300 Interest (I) = ₹310 - ₹300 = ₹10 I = (P × R × T) / 100 ⇒ 10 = (300 × R × 1/12) / 100 ⇒ 10 = (300R) / 1200 ⇒ 10 = R / 4 ⇒ R = 10 × 4 = 40% ∴ The rate of interest charged in the installment scheme is 40%.
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