A man wants to sell his scooter. He receives two offers: one is Rs 12000 in cash now, and the other is Rs 12880 as a credit payment to be made after 8 months, with money valued at 18 percent per annum simple interest. Which offer is financially better for the man?

Introduction / Context:
This question compares a cash offer with a credit offer payable after some time, where the time value of money is taken into account using a given interest rate. To decide which offer is better for the seller, we need to compare the immediate cash payment with the present value of the delayed payment, discounted at the specified interest rate.

Given Data / Assumptions:
- Cash offer = Rs 12000 received immediately.
- Credit offer = Rs 12880 to be received after 8 months.
- Rate of interest r = 18 percent per annum simple interest.
- Time until credit payment = 8 months = 8/12 = 2/3 of a year.
- We assume simple interest and no other charges or benefits.

Concept / Approach:
To compare fairly, we bring both offers to the same time point, usually the present. The cash offer is already present money. The credit offer must be converted to present value using simple interest. The present value P of an amount A due after t years at rate r percent per annum is P = A / (1 + r * t / 100). We will compute the present value of Rs 12880 due after 8 months and then compare it to Rs 12000.

Step-by-Step Solution:
Step 1: Credit amount A = Rs 12880. Step 2: Rate r = 18 percent per annum, time t = 8 months = 2/3 year. Step 3: Compute r * t / 100 = 18 * (2/3) / 100 = 12 / 100 = 0.12. Step 4: Present value P of the credit offer = 12880 / (1 + 0.12) = 12880 / 1.12. Step 5: Calculate 12880 / 1.12 = 11500 rupees. Step 6: Compare this to the cash offer: cash offer = 12000 rupees, present value of credit offer = 11500 rupees. Step 7: Since 12000 > 11500, the cash offer of Rs 12000 is financially better for the man.

Verification / Alternative check:
Think in the opposite direction. If the man chooses the cash offer of Rs 12000 and invests it at 18 percent simple interest for 8 months, its future value after 8 months is 12000 * (1 + 0.12) = 12000 * 1.12 = 13440 rupees, which is more than the delayed amount of 12880 under the credit offer. This confirms that taking cash and investing at the given rate yields a better outcome than accepting the credit offer.

Why Other Options Are Wrong:
Option Rs 12880: This is the nominal future amount, but its present value at 18 percent for 8 months is lower than 12000, so it is not better from today's perspective.
Option Both are equally good: Incorrect because 12000 is clearly larger than the present value of 11500 for the credit offer.
Option None of the above: Incorrect since one of the provided options, namely Rs 12000, is indeed strictly better.

Common Pitfalls:
Some learners compare only the nominal amounts 12880 and 12000 and think the higher future amount is always better, forgetting to discount it. Another common error is to misconvert months to years or to use compound interest formulas when simple interest is specified. Always convert time correctly and compute present value before making a decision.

Final Answer:
The cash offer of Rs 12000 is better.