Question

Thomas, a cunning Englishman buys a scooter from a garage for Rs. 3860 and sold it same day to Bholu for Rs. 5404, allowing him a credit of 2 years. If the rate of interest be 20% per annum. Calculate how much gain he has at the end ?
1. 5%
2. 7.5%
3. 0%
4. 10%

Answer 1

Correct Answer - Option 3 : 0%

Given∶

Thomas buys a scooter for Rs. 3860

He further sold it to Bholu on a credit of 2 years for Rs. 5404 at a rate of 20% p.a.

Formula Used∶

Profit% = [(S.P. - C.P.)/C.P.] × 100

Calculation∶

20% of Rs. 3860 = (20/100) × 3860 = Rs. 772

For 2 years, the interest = 2 × 772 = Rs. 1544

Therefore, the actual price (C.P.) of the scooter = 3860 + 1544 = Rs. 5404

It is given that S.P. of the scooter = Rs. 5404

Therefore, the gain by selling the scooter, Profit% = [(S.P. - C.P.)/C.P.) × 100 = [(5404 - 5404)/5404] × 100 = 0%

∴ The Englishman had a gain of 0%.