Question

A television set costs $350 cash. When bought on hire-purchase, a deposit of $35 is required, followed by 12 monthly payments of $30. How much is saved by paying cash?

a) $30

b) $90

c) $350

d) $25

Answer 1

The actual savings by paying cash for the television instead of through hire-purchase is $45, which means none of the given options (a) $30, (b) $90, (c) $350, or (d) $25 is correct.

Step-by-step explanation:

The question involves calculating the total amount paid for a television set through hire-purchase and comparing it with the cash price to determine the savings made by paying in cash. To find the total amount paid through hire-purchase, we first add the deposit to the total of the monthly payments. Then we subtract the cash price of the television from the total amount paid on hire-purchase to find the savings.

Hire-purchase total: Initial deposit of $35 plus 12 monthly payments of $30 equals $35 + (12 × $30) = $395.

Cash price: $350.

So, the savings made by paying cash equals the hire-purchase total minus the cash price: $395 - $350 = $45. Therefore, none of the given options are correct as the actual savings are $45.