Question

A mobile is available for Rs. $1,600$ each on cash or for Rs. $1,000$ cash down payment and Rs. $645$ to be paid after six month. Find the rate of interest charged under the instalment plan

Answer 1

Cost of mobile $=$ Rs. $1,600$
Down payment $=$ Rs. $1000$
Money paid in instalment $=$ Rs. $645$
Total money paid in instalment scheme $=$ Rs. $1000+$ Rs. $645=$ Rs. $1645$
Interest amount $=$ Rs. $1645-$ Rs. $1600=$ Rs. $45$
Time $=6$ months $=\frac{6}{12}$ years $=0.5$ years.
$\frac{P\times T\times R}{100}=I$
$\frac{1600\times 0.5\times R}{100}=45$
$\therefore 16\times 0.5\times R=45$
$\therefore 8R=45$
$R=5.625\%$
Rate of interest is $5.625\%$.