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The simple interest for both 48months and 54 months option ,is 13,5%per annum .a deposit of 20% is also required for both option .calculate he balance owed

User Pbeta
by
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1 Answer

6 votes

Answer:

The amount of deposit required is R37,999 for both

The percentage of purchase price for the required deposit is 20%

Therefore, deposit required=20%*R189,995

=R37,999

The balance owed is the outstanding balance after payment of deposit plus the interest, bearing in mind that interest is computed using the simple interest approach

I=PRT

balance after payment of deposit=R189,995-R37,999

=R151,996

R=13.5% per year

T=48 months and 54 months

Interest on 48 month option=151,996*13.5%*48/12

= R82,077.84

Interest on 54 month option=151,996*13.5%*54/12

= R 92,337.57

The total payment without the initial deposit is the outstanding balance after payment of deposit plus the interest

Total payment for 48 month option=R151,996+R 92,337.57

=R 244,333.57

Total payment for 54 month option=R151,996+R82,077.84

=R 234,073.84

Hope it helped!

User RP Niemeyer
by
8.2k points
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