Question

An artificial jewellery item is available for Rs.$850$ cash or Rs.$600$ cash-down payment and Rs.$270$ to be paid in one installment after $6$ months. Find the rate of interest charged under installment scheme.

Answer 1

Cost of artificial jewellery $=$Rs.$850$
Down payment $=$ Rs.$600$
Money paid in installment $=$Rs. $270$
Total money paid in installment scheme
$=$ Rs.$600+$Rs.$270=$ Rs.$870$
Interest amount $=$Rs.$870-$ Rs.$850=$ Rs.$20$
Interest $=\frac{Principal\times Time\times RateofInterest}{100}$
Substituting, Interest $=$ Rs.$20$
Times$=\frac{6}{12}$ year
and principal $=$Rs.$850$, we have
$\Rightarrow$ $20=\frac{850\times 6\times R}{12\times 100}$
$\Rightarrow$ $20=\frac{850\times R}{2\times 100}$
$\Rightarrow$ $2=\frac{85\times R}{2\times 100}$

$R=4.7\%$