A washing machine is available for Rs. 13,500 cash or Rs. 6,500 as cash down

payment followed by three monthly instalments of Rs. 2,500 each. Find the rate of

interest charged under instalment plan.

In Solving this question

**Cash price of washing machine = Rs. 135000**

**Cash down payment = Rs. 6500**

**Balance due = Rs(13500 – 6500) = rs. 7000**

**No. of equal instalments = 3**

**Amountof each instalment =rs. 2500**

**Amount paid in installment = Rs. 7500**

**Therefore, interest paid in installment scheme = rs(7500-7000) = rs. 500**

**Principal for the 1 ^{st}month = Rs. 7000**

**Principal for the 2 ^{nd}month = Rs. 4500**

**Principal for the 3 ^{rd}month = Rs. 2000**

**Total = Rs. 13500**

**Let the rate of interest be r% per annum**

**I = p*r*1 / 1200**

**Then, I = 13500*r*1 / 100*12**

**=> 500 =13500*r*1 / 100*12**

**=>r = 500*12/ 135**

**=>r = 44.4 %**

Why We Have Taken The Time As One Month