Commercial arithmetic II lesson on hire purchase
Answer Text: Commercial arithmetic II lesson on hire purchase:Hire Purchase.Method of buying goods and services by instalments. The interest charged for buying goods or services on credit is called carrying charge. Hire purchase = Deposit + (instalments x period) Example 1.Achieng wants to buy a sewing machine on hire purchase. It has a cash price of ksh 7500.She can pay a cash price or make a down payment of sh 2250 and 15 monthly instalments of sh.550 each. How much interest does she pay under the instalment plan?Example 2.The cash price of a television set is sh. 25,000.A customer paid a deposit of sh.3,750.He repaid the amount owing in 24 equal monthly installments. If he was charged simple interest at the rate of 40% p.a, how much was each installment.
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