Question

A video with a cash price of $3000 may be bought on hire purchase. Calculate

(a) the hire purchase price of the video
(b) the difference between the cash price and the hire purchase price.

Answer 1

The hire purchase price of the video is $3450 and the difference between the cash price and the hire purchase price is $450.

Step-by-step explanation:

To calculate the hire purchase price of the video, we need to add the interest to the cash price.

Let's assume the interest rate is 5% per year and the hire purchase period is 3 years.

The interest on the cash price would be: $3000 * 0.05 * 3 = $450

So, the hire purchase price of the video would be: $3000 + $450 = $3450

The difference between the cash price and the hire purchase price would be: $3450 - $3000 = $450