A Lady's Car Purchase: Calculating Interest Rate per Quarter

The Interest Rate Calculation

The interest rate per quarter is 33.33% because she pays 8,000 shillings on a remaining amount of 24,000 shillings each quarter.

To calculate the interest rate per quarter, we can use the given information and the formula for simple interest:

Simple Interest (SI) = Principal (P) x Rate (R) x Time (T)

Interest Rate Calculation Step-by-Step

In this case, the lady wants to purchase a car for 40,000 shillings, and she paid an initial amount of 16,000 shillings. The remaining amount to be paid in installments is (40,000 - 16,000) = 24,000 shillings.

She pays an installment of 8,000 shillings for three quarters. So, for each quarter, she pays 8,000 shillings.

Now, let's use the simple interest formula to find the interest rate per quarter:

8,000 (installment) = 24,000 (remaining amount) x R x 1 (time in quarters)

8,000 = 24,000R

R = 8,000 / 24,000

R = 1/3

Interest Rate per Quarter = 0.3333 x 100 = 33.33%

Therefore, the interest rate per quarter is approximately 33.33%.

Further Interest Rate Calculation

The quarterly interest rate for the car purchase is approximately 0.4444 or 44.44%.

To calculate the interest rate per quarter for this car purchase, we can break down the payments:

1. The lady wants to purchase a car for sh. 40,000.

2. She paid an initial amount of sh. 16,000.

3. She paid sh. 8,000 in three installments for the remaining amount.

Interest Rate Calculation Formula:

r = (Interest * 4) / (P * n)

r ≈ 0.4444 (rounded to four decimal places)

So, the quarterly interest rate for this car purchase is approximately 0.4444 or 44.44%.