# A bicycle is sold for 3,000 cash or for Rs 1,000 cash down payment followed by two monthly installments of Rs 1024 each. Compute the rate of interest charged under the installment scheme.

Answer

Verified

365.7k+ views

Hint- Use the basic formula ${\text{Interest = }}\dfrac{{P \times R \times T}}{{100}}$, where P

is the Principle amount,R is the rate of interest, and T is the time duration.

There are two modes that are firstly you give cash RS 3000 or pay Rs 1000 down payment in the initial stages to get the bicycle.

Hence, ${\text{Principal amount = Rs}}\left( {3000 - 1000} \right) = 2000{\text{ Rs}}$

Now in case someone opts for down payment then they have to give Rs 1024 as installments for 2 months.

Hence, ${\text{Interest = (Time of installment}} \times {\text{Amount of installment) - Principal amount}}$

So, ${\text{Interest = 2}} \times {\text{1024 - 2000 = 2048 - 2000 = 48 Rs}}$

Now we know that ${\text{Interest = }}\dfrac{{P \times R \times T}}{{100}}$where P is principal value, R is rate of interest, T is duration of installments.

So substituting values

${\text{48 = }}\dfrac{{2000 \times R \times 2}}{{100 \times 12}}$ As we are taking time duration in years hence we have ${\text{T = }}\dfrac{2}{{12}}$

On solving we get ${\text{R = }}\dfrac{{48 \times 100 \times 12}}{{2000 \times 2}} = 14.4\% $

Note- While computing interest problems always keep hold of formulae of interest and always take time duration in terms of years and not months otherwise you may land up on the wrong answer.

is the Principle amount,R is the rate of interest, and T is the time duration.

There are two modes that are firstly you give cash RS 3000 or pay Rs 1000 down payment in the initial stages to get the bicycle.

Hence, ${\text{Principal amount = Rs}}\left( {3000 - 1000} \right) = 2000{\text{ Rs}}$

Now in case someone opts for down payment then they have to give Rs 1024 as installments for 2 months.

Hence, ${\text{Interest = (Time of installment}} \times {\text{Amount of installment) - Principal amount}}$

So, ${\text{Interest = 2}} \times {\text{1024 - 2000 = 2048 - 2000 = 48 Rs}}$

Now we know that ${\text{Interest = }}\dfrac{{P \times R \times T}}{{100}}$where P is principal value, R is rate of interest, T is duration of installments.

So substituting values

${\text{48 = }}\dfrac{{2000 \times R \times 2}}{{100 \times 12}}$ As we are taking time duration in years hence we have ${\text{T = }}\dfrac{2}{{12}}$

On solving we get ${\text{R = }}\dfrac{{48 \times 100 \times 12}}{{2000 \times 2}} = 14.4\% $

Note- While computing interest problems always keep hold of formulae of interest and always take time duration in terms of years and not months otherwise you may land up on the wrong answer.

Last updated date: 29th Sep 2023

â€¢

Total views: 365.7k

â€¢

Views today: 6.65k

Recently Updated Pages

What do you mean by public facilities

Slogan on Noise Pollution

Paragraph on Friendship

Disadvantages of Advertising

Prepare a Pocket Guide on First Aid for your School

What is the Full Form of ILO, UNICEF and UNESCO

Trending doubts

How do you solve x2 11x + 28 0 using the quadratic class 10 maths CBSE

Difference between Prokaryotic cell and Eukaryotic class 11 biology CBSE

Summary of the poem Where the Mind is Without Fear class 8 english CBSE

Difference Between Plant Cell and Animal Cell

What is the basic unit of classification class 11 biology CBSE

Fill the blanks with the suitable prepositions 1 The class 9 english CBSE

One cusec is equal to how many liters class 8 maths CBSE

Differentiate between homogeneous and heterogeneous class 12 chemistry CBSE

Give 10 examples for herbs , shrubs , climbers , creepers