The marked price of a car is $49,500. A person can pay deposit of 30%
and interest at 12% per annum is charged on the outstanding balance.
The total amount payable is to be paid in 2 1/2 years. A) the amount of
each monthly installment b) The hire purchase of the car

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abiolataiwo2015 abiolataiwo2015 · Answer 1 · 2022-05-06T13:52:12+02:00

The amount of each monthly installment is $1,294 and the hire purchase of the car is: $4,158.

a. Monthly installment

2 1/2 years=30 months

First step

Amount payable=[49,500×(1-.30)] /30 months

Amount payable=(49,500×.70)/30 months

Amount payable=$34,650/30 months

Amount payable=$1,155

Second step

Amount of monthly installment=[$1,155×(1+0.12)

Amount of monthly installment=$1,155×1.12

Amount of monthly installment=$1,293.6

Amount of monthly installment=$1,294 (Approximately)

b. Hire purchase

Hire purchase=$1,155×.12×30 months

Hire purchase=$4,158

Therefore the amount of each monthly installment is $1,294 and the hire purchase of the car is: $4,158.

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