A man wants to sell his scooter. There are two offers, one at Rs. 12,…

Question

A man wants to sell his scooter. There are two offers, one at Rs. 12,000 cash and the other a credit of Rs. 12,880 to be paid after 8 months, money being at 18% per annum. Which is the better offer?

Accepted Answer

Option A. Rs. 12,000 in cash. Answer & Solution Answer: Option A Solution: & = \, P .W .\, of\, Rs .\, 12,880\, due\, 8\, months\, hence & = Rs.\, [ 12880 × 100100 + ( 18 × 812 ) ] & = Rs.\, ( 12880 × 100112 ) & = Rs.\,11500 Clearly 12000 in cash is a better offer.