Aptitude - True Discount - Discussion

What is P.W? Anyone can explain?

The question here asks which option is better for owner of the scooter.
So by explanation of Madhu.T cash is better than credit.

Because if we take cash now and give it for interest we get 1440 after 8 months at 18% interest per annum. But if we accept credit we only get 880 after 8 months.

I agree with deepak as the solution says if I pay 12800 later thats just 11500 now so we are saving 500 here.

So it's better to pay later.

@Deepak.

We are only concerned about the two cases so option A is better.

You are considering 18% rate without taking the dealer's scheme so its impossible.

Agreed with @Deepak.

Simply. I would like to pay 11500(PW) instead of paying 12000(PW).

It should be mentioned "better from which side"...

Hey Guys... I am little worried about this solution. Let me put my thoughts below.
Cash = 12000 Today
Interest rate 18% /Annum.
After 8 Months Interest will be 12000*(8*18%/12)= 1440.

If I will not pay 12000 now , then my worth will be 12000+1440 = 13440.
If I pay 12800 after 8 months, still I will have 13440-12880= 560 in my hand.

If I pay 12000 now, then I cant have 560 in my hand which is a interest from this cash.

So I feel 12880 after 8 months is best answer.

After 8 does not mean in 4 months as the previous question. The question does not say that in 8 months but after 8months starting from 4 left months of the year the man will start to pay right?

Just see my ans:-
By taking after 8 months how much we will get excess money
= 12880-12000 = 880/- ..........(Pls remind this),

If we take cash 12000/- now it self the interest would be after 8 months @ 18% P.A

= 12000*(18/100)*(8/12)
= 1440

so instead of going for credit, cash is better.

Hey let me explain
here given
P.W. Is 12000
now if we calculate the P.W. Of Rs. 12880
which will recieved after 8 months
thus formula
P.W.=100*amt./100+(R*T)
Is used.