Question

Mr Jackson's car insurance is £840 He can either: pay the full amount within seven days and receive 5% discount or pay by direct debit, which will cost 8% more. The direct debit is paid in 12 equal monthly amounts. (a) If he chooses direct debit, how much will his monthly payment be?​

Answer 1

£75.60

Explanation:

If Mr Jackson pays the full amount within seven days, he will receive a 5% discount on the original price of £840.

5% of £840 is (5/100)*£840 = £42

So if Mr Jackson pays within seven days, he will only have to pay £840 - £42 = £798.

If he chooses to pay by direct debit, he will have to pay 8% more than the original price of £840.

8% of £840 is (8/100)*£840 = £67.20

So if he chooses to pay by direct debit, he will have to pay £840 + £67.20 = £907.20 in total.

This amount will be divided into 12 equal monthly payments, so each monthly payment will be:

£907.20 / 12 = £75.60

Therefore, if Mr Jackson chooses to pay by direct debit, his monthly payment will be £75.60.