Question

Ken pays a down payment of 20% on the cash price of a car and this amounted to $30,000. He is due to pay an installment of $3,600 per month for 3 years. Calculate:

(i) The cash price of the car
(ii) The amount Ken would have paid in installments
(iii) The total Ken would have paid for the car
(iv) The amount that Ken would have saved by buying the car cash

Answer 1

(i) $150,000 (ii) $129,600 (iii) $279,600 (iv) $129,600

(v) 86.4%

Explanation:

(i) 20% = $30,000

100/20 = 5

cash price =$30,000 *5

=$$150,000

(ii) Installment per month= $3600

12 months =$3600*12

=$43,200

Per year =$43,200

3 years =$43,200*3

=$129,600

(iii) Cash Price = $150,000

Installment = + $129,000

Total Payment = $279,000

(iv) Total Payment = $279,000

Cash Price = - $150,000

Money Saved = $129,600

(v) Amount saved as a % cash price = $129,600 *100

150,000

= 12,960,000

150,000

= 86.4%