Question

A washing machine is available for remote 13500 cash or RS 6500 as cash down payment for three monthly installments of RS 2500 each . Find the rate of interest charged under installment plan

Answer 1

Cash price of the article = Rs 13500
Cash down payment = Rs 6500
Installment amount paid per month be Rs 2500
Number of installments = 3
Amount paid in installments = 6500 + 3*2500
Interest paid = 14000-13500 =500
The buyer owes to the seller for first month = 7000
The buyer owes to the seller for 2nd month = 4500
The buyer owes to the seller for 3rd month = 2000
∴ Total principal for one month = 13500
Let Rate of interest = r %

I= PRT
500 =13500 * r * 1/12 (1/12 for one month)

=> r= 0.44
= 44%