Correct Answer - Option 4 : 30%
Given:
Actual price = Rs. 1680
Down payment = Rs. 400
Formula used:
Simple Interest = PRT/100
Calculation:
Total amount = Rs. (1400 + 287) = Rs. 1687
Interest paid = Rs. (1687 – 1680)
⇒ Rs. 7
Interest will be applied on = Rs. (1680 – 1400) = Rs. 280
Simple Interest = PRT/100
⇒ 7 = (280 × R × 1)/100
⇒ R = 700/280
⇒ R = 2.5% per month
⇒ R = 2.5 × 12
⇒ R = 30% per annum
∴ Rate of simple interest charged is 30% per annum.