Question

A video which has a cash price of $3000 may be bought on hire purchase . To obtain the video on hire purchase, a deposit of 10% of the cash price is made and 30 monthly installments of $150.50 each are required.Calculate(a) hire purchase price of video and (b) the difference between the cash price and the hire purchase price as a percentage of the cash price

a. $2700; 10%
b. $2700; 90%
c. $3300; 10%
d. $3300; 90%

Answer 1

The hire purchase price of the video is $4815. The difference between the cash price and the hire purchase price is 90% of the cash price.

Step-by-step explanation:

To calculate the hire purchase price of the video, we need to add the deposit and the total cost of the monthly installments.

1. Deposit = $3000 x 0.10 = $300
2. Total cost of monthly installments = 30 x $150.50 = $4515.00
3. Hire purchase price = deposit + total cost of monthly installments = $300 + $4515.00 = $4815.00

To calculate the difference between the cash price and the hire purchase price as a percentage of the cash price, we can use the formula: ((hire purchase price - cash price) / cash price) x 100%.

Difference = (($4815.00 - $3000) / $3000) x 100% = ($1815.00 / $3000) x 100% = 60.5%.