Discussion
A mobile phone is sold for Rs.4,400 cash or for Rs.2,000 cash down payment together with Rs.2,440 to be paid after a month. What is the rate of interest charged under the instalment plan?
Answer: C
The rate is 20% per annum.
The cash price is 4400 and 2000 is paid at once, so 2400 is the outstanding amount. After one month 2440 is paid, so the interest is 40 on 2400 for one month, which is 1/60 of the amount per month.
\[ \frac{40}{2400}\times12\times100=20\% \]
10%, 15% and 25% would give a different monthly interest.
The buyer who pays by instalments gets the phone for 2000 now and 2440 later, a total of 4440 against the cash price of 4400. The extra 40 on the 2400 deferred is the interest for a month. A rate of 1/60 per month is 12/60 = 20% for a year.
Post your comment
Please log in or register to post a comment.
Examination Categories
- SSC Exams
- Banking Exams
- Teaching Exams
- Civil Services Exams
- Railways Exams
- Engineering Recruitment Exams
- Defence Exams
- State Government Exams
- Police Exams
- Insurance Exams
- Nursing Exams
- Other Government Exams
- NRA CET
- PG Entrance Exams
- Campus Placement
- MBA Entrance Exams
- CUET and UG Entrance
- Judiciary Exams
- Regulatory Body Exams
- Software Development