A refrigerator can be bought for ₹9000 cash, or for ₹2000 cash down together with two equal annual instalments of ₹4000 each. The rate of simple interest per annum charged under the instalment plan is what percent?

Question

Accepted Answer

10. The buyer finances 9000 − 2000 = ₹7000. Bring everything to the end of year 2: the debt becomes 7000(1 + 2r/100); the first instalment, paid a year earlier, is worth 4000(1 + r/100) and the second is ₹4000. So 7000 + 140r = 4000 + 40r + 4000 → 100r = 1000 → r = 10%.

A refrigerator can be bought for ₹9000 cash, or for ₹2000 cash down together with two equal annual instalments of ₹4000 each. The rate of simple interest per annum charged under the instalment plan is what percent?

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