Multiple choice

A man purchased a cycle for Rs. 3000 and agreed to pay 12% on the amount as interest. He repaid principal and interest in 12 equal monthly installments. Find the amount of each installment.

  1. Rs. 280

  2. Rs. 264

  3. Rs. 260

  4. Rs. 370

  5. N.A.
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A Correct answer
Explanation

Principal = 3000. Interest = 12% of 3000 = 360. Total amount = 3360. Monthly installment = 3360 / 12 = 280.

AI explanation

The total interest on the principal of 3000 at 12% is 3000 times 0.12, which equals 360. Adding this interest to the principal gives a total repayment amount of 3360. Dividing this total amount by 12 equal monthly installments gives 3360 divided by 12, which equals 280.

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