Hire-purchase price of a machinery is Rs. 30,000 and its cash price is Rs. 24,000. Payment is to be made in three equal installments. State the interest of second installment.

The correct answer is A. Rs. 1,500.

The hire-purchase price of the machinery is Rs. 30,000 and its cash price is Rs. 24,000. This means that the interest on the hire-purchase price is Rs. 6,000. The payment is to be made in three equal installments, so each installment is Rs. 10,000. The interest on the second installment is therefore Rs. 1,500.

Option B is incorrect because it is the total interest on the hire-purchase price. Option C is incorrect because it is the interest on the first installment. Option D is incorrect because it is the cash price of the machinery.