A Motorbike can be purchased on cash payment of Rs. 30000. But the same Motorbike can also be purchased on the cash down payment of Rs 7000 and the rest can be paid in three equal annual instalments of Rs. 8000 for next three years. Find the rate of simple interest?
Cash Price = 30000 Less Cash Down Payment = (7000) Balance = 23000 First Installment = (8000) Balance = 15000 Second Installment = (8000) Balance = 7000 Third Installment = (8000) Balance = (1000) Now Interest on First year = (23000 × r ×1 )/100 Interest on Second year = (15000 × r ×1)/100 Interest of Third year = (7000 × r ×1 )/100 Now, according to the question (23000 × r ×1 )/100+ (15000 × r ×1)/100+ (7000 × r ×1 )/100=1000 (1000r (23+15+7))/100=1000 45r/100=1 r= 100/45 = 2 2/9%
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