Question

A Mustang GT on Missouri has a marked price of $60,000. If paid in cash you are to pay 15% less than the marked price. It also have a hire purchase plan which states to pay 30% of the marked price and $1000 monthly payments for 4 yrs.

A) Discount on Cash price.
B) Cash Price.
C) Amount Payable.
D ) Hire Purchase Price
E ) Difference between the Hire Purchase price and the Cash Price.

Answer 1

A) Discount on Cash price. ($9,000 )

B) Cash Price. ($51,000 )

C) Amount Payable. ($51,000 )

D ) Hire Purchase Price ($66,000 )

E ) Difference between the Hire Purchase price and the Cash Price. ($15,000 )

Explanation:

The following is the workings:

The GT Missouri marked price = $60,000

If paying cash,

Discount = 15%

(15/ 100 ) x $60,000 = $9,000

Actual Price (less discount) = $60,000 - $9000 = $51,000

If hire purchase,

Firstly, 30% marked price,

= (30/100) x $60,000 = $18,000

Monthly payment = $1000

Period = 4 years = 4 x 12 = 48 months

Total monthly payment,

$1000 x 48 = $48, 000

Therefore, total hire purchase payment

Monthly payment + initial 30% payment

= $18,000 + $48,000 = $66,000

Difference between hire purchase and cash price,

= $66,000 - $51,000 = $15,000