Question

Lebo decided to rather buy a new lounge suite for R42 000. She paid a 15% cash deposit and the balance is paid through a hire purchase loan agreement. She repays the loan over 4 years at an interest rate of 19% p.a. on the full amount of the loan. Calculate her monthly instalments over the 4 year period.​

Answer 1

Explanation:

First you need to find the balance amount that she paid in instalments which is 42000 * 15% which is equalled to 6300.

Then you need to minus 42000 - 6300 as 630l is the price she paid as cash deposit which is equalled 35700.

Now, to find the interest the formula is I = p * r/100 which equalled 7890 for a year. To calculate her monthly instalments, you have to divide 7890 divided by 12 months which equals 665.