Question : Anandi bought a smartwatch from an electronic store for Rs.4,400. Since she had less money, she paid Rs.2,000 for the down payment and the shopkeeper offered her an alternative to pay Rs.2,440 after 1 month. Find the rate of interest being charged at simple interest by the shopkeeper in this instalment option.
Option 1: 20%
Option 2: 10%
Option 3: 22%
Option 4: 15%
Correct Answer: 20%
Solution :
Anandi bought a smartwatch from an electronic store for = Rs.4,400
Down payment = Rs.2,000
Alternative to pay after 1 month = Rs.2,440
Simple Interest (SI) = $\frac{(\text{P} × \text{T} × \text{R})}{100}$
where P is the principal, T is the time taken and R is the rate of interest.
The remaining payment after down payment = 4,400 – 2,000 = 2,400
Instalment paid at the end of one month = 2,440
$\therefore$ Interest = 2,440 – 2,400 = 40
SI = $\frac{(2,400 × (\frac{1}{12}) × \text{R})}{100}$ = 40
⇒ R = $\frac{(100 × 40)}{(2,400 × (\frac{1}{12}))}$ = 20%
Hence, the correct answer is 20%.
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