Question

Bala and Co charged SI for loans availed by buyers under installment scheme. Find the rate of SI charged, if $8$ monthly installments of Rs. $2000$ each were paid for an article costing Rs. $21000$ with a down payment of Rs. $4000$.

Answer 1

Cost of the article $=$ Rs. $21000$
Down payment made $=$ Rs. $4000$
Loan amount $=21000-4000=$ Rs. $17000$
Let r be the rate of S..I charged per annum.
Since EMI $=$ Rs. $2000$, total amount paid $=2000\times 8=$ Rs. $16000$
S.I. paid $=$ Rs. $17000-16000=1000$
Hence S.I. $=1000$ for $8$ months on Rs. $16000$ at $r\%$ p.a.
$1000=16000\times \frac{r}{100}\times \frac{8}{12}$
$r=9.375\%$