Question

A sonata watch is sold for Rs. 440 cash or for Rs. 200 cash down payment together with Rs. 244 to be paid after one month. Find the rate of interest charged in the instalment scheme :

• A. 10%
• B. 15%
• C. 20%
• D. 25%

Answer 1

The correct option is C 20%

Principal for next month = 440 - 200 = 240
Amount paid after next month = 244
Therefore interest charged at Rs. 240 = 4
$\therefore 4=\frac{240\times r\times 1}{12\times 100}$
r = 20% per annum