Question

John lent 2,550 to Mohan at 7.5 per cent

per annum. If Mohan discharges the debt after
8 months by giving an old black and white
television and 1,422.50. Find the price of
the television.​

Answer 1

Answer: $1,077.50 or $1,078.06 (see below)

Explanation:

Since the interest is applied after 1 year and the debt was repaid in 8 months, no interest was accrued on the $2,550 loan.

Thus, the price of the tv is: $2,550 - $1,422.50 = $1,077.50

Note: If interest is charged for the 8 months (3/4 of a year), then the interest added to the loan amount is: 0.75(3/4) = $0.56

⇒ the the price of the tv is: $1,077.50 + $0.56 = $1,078.06