A clock is sold for ₹550 cash or in the instalment scheme, for ₹250 cash down payment and ₹310 after one month. Find the rate of interest charged in the instalment scheme.
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 40%.
Given that, cash price = 550
Down payment = 250
Amount paid after one month = 310
Sum of money = Cash price - down payment
Interest = Amount paid after one month - Sum of money
Time = 1 month = 1/12 years
SI = (P × R × T)/100
According to the given question,
Sum of money = 550 - 250 = 300
Interest = 310 - 300 = 10
⇒ 10 = (300 × R × 1/12)/100
⇒ 3R = 120
⇒ R = 40%