Given Principal amount P = Rs 8000
Time period T = 2 years
Rate of interest R = 18% p.a.
We know that simple interest = (P × T × R)/100
On substituting these values in above equation we get
SI = (8000 × 2 × 18)/100
= Rs 2880
Total amount payable by Reema after 2 years = Rs 8,000 + Rs 2,880
= Rs 10,880
Amount paid = Rs 10,400
Value of the watch = Rs 10,880 − Rs 10,400 = Rs 480