A laptop charger is sold for Rs.2,540 in cash or for a down payment of Rs.1,340 in cash together with Rs.1,205 to be paid after one month. Find the rate of interest charged in the installment scheme.
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 5% p.a.
Installment price = 1340 + 1205 = Rs. 2545
Extra cost = 2545 - 2540 = Rs. 5
Principal = 2540 - 1340 = Rs. 1200
Time = 1 month = 1/12 years
Let the rate of interest be R%.
Simple Interest = (Principal × Rate × Time)/100
⇒ 5 = (1200 × R × 1/12)/100
⇒ R = 5
Therefore, the rate of interest charged in the installment scheme is 5% per annum.