Question

A wash machine costs Rs. 10,200 cash down. It was bought by paying a down payment of Rs. 2,000 and the balance was agreed to be paid in 6 equal monthly installments of Rs. 1,500 each. Find the rate of interest.

Answer 1

Cost price of washing machine $=10,200$ Rs.

Down payment $=2,000$ Rs.

Balance to be paid $=10,200-2,000=8,200$ Rs.

Each instalment costs $1,500$ Rs. So, total amount paid in instalments $=1,500\times 6=9,000$ Rs.

$E=9000-8200=800$

$\therefore r=\frac{2400E}{n\left[\right(n+1)I-2E]}$

$=\frac{2400\times 800}{6[7\times 15000-2\times 800]}$

$=\frac{2400\times 800}{6(105000-1600)}=35.95$

Thus, the rate per annum is $36\%$