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?
Rs. 12,000 in cash
Rs. 12,880 at credit
Both are equally good
none
Explanation:
P.W of Rs.12,880 due 8 months hence =Rs.$\dfrac{12,880 \times 100}{100+(18 \times \dfrac{8}{12})}$
=Rs.$\dfrac{12,880 \times 100}{112}$
=Rs.11,500
P.W of Rs.12,880 due 8 months hence =Rs.$\dfrac{12,880 \times 100}{100+(18 \times \dfrac{8}{12})}$
=Rs.$\dfrac{12,880 \times 100}{112}$
=Rs.11,500