Multiple choice

A cell phone is available for Rs. 600 or for Rs. 300 cash down payment together with Rs. 360 to be paid after two months. Find the rate of interest charged under this scheme.

  1. 120%

  2. 20%

  3. 50%

  4. None of these
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A Correct answer
Explanation

Cash price is 600. Down payment is 300, remaining balance is 300. After 2 months, 360 is paid, so interest is 60. Simple interest formula: I = (P * R * T) / 100. 60 = (300 * R * (2/12)) / 100. 60 = 3 * R * (1/6) = R / 2. R = 120%.

AI explanation

The remaining balance of Rs. 300 is paid as Rs. 360 after two months, meaning the interest paid is Rs. 60 on a principal of Rs. 300. Since two months is one-sixth of a year, the simple interest formula gives 60 = (300 * rate * 1/6) / 100, which simplifies to rate = 120. This gives an annual rate of 120%, making the result 120%.

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