Given: Cash price = ₹3,900 Down payment = ₹1,700 Balance financed = 3,900 − 1,700 = ₹2,200 EMI = ₹480 Number of EMIs = 5 Total instalments paid = 480 × 5 = ₹2,400 Step 1: Find total interest Interest = Total instalments − Balance financed = 2,400 − 2,200 = ₹200 Step 2: Find time EMIs are monthly → Time = 5 months = 5/12 years Step 3: Approximate rate of interest formula (Simple Interest) Rate=2*Interest*100/principal*time Substitute values: Rate=2*200*100/2200*5÷12 40000÷916.67~43.6% This is for the full period, but since instalments are paid monthly, we take half of this (average outstanding method): 43.6÷2~21.8 ✅ Approximate Rate of Interest ≈ 22% Correct Answer: (c) 22%

CA Foundation doubt

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Asked by Raunak6 Jan 20261634 views

2 answers

Kripa · 6 Jan 2026
EMI monthly assume krna h??
Shivaprasad.M. · 6 Jan 2026
Given: Cash price = ₹3,900 Down payment = ₹1,700 Balance financed = 3,900 − 1,700 = ₹2,200 EMI = ₹480 Number of EMIs = 5 Total instalments paid = 480 × 5 = ₹2,400 Step 1: Find total interest Interest = Total instalments − Balance financed = 2,400 − 2,200 = ₹200 Step 2: Find time EMIs are monthly → Time = 5 months = 5/12 years Step 3: Approximate rate of interest formula (Simple Interest) Rate=2*Interest*100/principal*time Substitute values: Rate=2*200*100/2200*5÷12 40000÷916.67~43.6% This is for the full period, but since instalments are paid monthly, we take half of this (average outstanding method): 43.6÷2~21.8 ✅ Approximate Rate of Interest ≈ 22% Correct Answer: (c) 22%

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