Question
A laptop charger is sold for Rs.2,540 in cash or for a
down payment of Rs.1,340 in cash together with Rs.1,205 to be paid after one month. Find the rate of interest charged in the installment scheme.Solution
The laptop charger costs Rs. 2,540 in cash. The installment option requires a down payment of Rs. 1,340 and a second payment of Rs. 1,205 after one month. The extra amount paid is Rs. 5 (Rs. 1,205 - Rs. 1,200). Simple Interest (SI) = Rs. 5 Principal (P) =2540-1340 = Rs. 1,200 Time (T) = 1/12 years Using the formula SI = PXRXT /100 we get: 5 = (1,200×R×1)/ 12×100 R = 5%
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