A playstation is available for $39000 cash or $17000 as down payment followed by five equal monthly instalments of $4800 each. The simple rate of interest per annum under the instalment plan would be Choose the correct choice from the following:
A) 18%
B) 19%
C) 21.2%
D) 21.81%
E) 22.07%
Simple interest SI = (P*R*T)/100   where P is the principal amount   R is the rate of interest   and T is time in years   the way I see it:playstation on down payment of 17,000, customer is not paying any interest. it is the remaining sum which will be paid for 5 months that will bear an interest. Therefore, the principal amount for which interest is being charged is 39,000 - 17,000 = 22,000   For this 22,000 a total sum of 5*4800 = 24,000 was pain. (Time is five months, so T = 5/12, as T is in years.)   thus, SI = 2000 or   2000 = (P*R*T)/100   2000 = (22,000*R*5)/(100*12)   R = (2,000*12*100)/22,000*5   R = 21.81%   Therefore answer is 21.81%
<result>D</result>
A playstation is available for $39000 cash or $17000 as down payment followed by five equal monthly instalments of $4800 each. The simple rate of interest per annum under the instalment plan would be