True Discount - General Aptitude

Q1:

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?

A Rs. 12,000 in cash

B Rs. 12,880 at credit

C Both are equally good

ANS:A - Rs. 12,000 in cash

P.W. of Rs. 12,880 due 8 months hence
= Rs. 12880 x 100
100 + 18 x 8
12
 
= Rs. 12880 x 100
112
  = Rs. 11500.