!) Mandy bought a set of fitness equipment by paying zero downpayment and monthly instalments of $265 over 18 months.If the flat rate of interest was 4% p.a., find the cash price of the set.

The answer is $4500. (Can show me the working for this question)

2) The cash price of an air-conditioner was $1800.Vernon bought it by paying monthly instalments of $129 with zero downpayment.If the flat rate of interest is 6% p.a. ,find the number of instalments he has to make before gaining ownership of the air-conditioner.

The answer is 15. (Can show me the working for this question)

Thanks a lot.I think these questions might be easy for some of u.

# Maths Question on Hire Purchase.

Started by
Slash31
, Mar 31 2008 02:09 PM

5 replies to this topic

### #1

Posted 31 March 2008 - 02:09 PM

### #2

Posted 31 March 2008 - 09:36 PM

I'm guessing this is compound interest? Did your teacher say compounded how many times a year?

I think this page could help you: http://en.wikipedia....finance_theory)

I think this page could help you: http://en.wikipedia....finance_theory)

**Edited by katrie, 31 March 2008 - 09:56 PM.**

### #3

Posted 01 April 2008 - 03:20 AM

1)

X= Cash Price

X + (0.04 * (18/12) * X) = 265 * 18

(X * 1) + (0.04 * (18/12) * X) = 265* 18

X ( 1 + (0.04 * 1.5)) = 265 * 18

X ( 1 + 0.06 ) = 4770

X = 4770 / 1.06

= 4500 ==> Therefore, the case price will be $ 4500

2)

Y = No of Installments

1800 + (0.06 * 1800) = 129 * Y

1800 (1 + 0.06) = 129 * Y

Y = (1800 * 1.06) / 129

= 14.79

Therefore, Vernon needs to have 15 times of installments to gain ownership of air-conditioner.

X= Cash Price

X + (0.04 * (18/12) * X) = 265 * 18

(X * 1) + (0.04 * (18/12) * X) = 265* 18

X ( 1 + (0.04 * 1.5)) = 265 * 18

X ( 1 + 0.06 ) = 4770

X = 4770 / 1.06

= 4500 ==> Therefore, the case price will be $ 4500

2)

Y = No of Installments

1800 + (0.06 * 1800) = 129 * Y

1800 (1 + 0.06) = 129 * Y

Y = (1800 * 1.06) / 129

= 14.79

Therefore, Vernon needs to have 15 times of installments to gain ownership of air-conditioner.

### #4

Posted 01 April 2008 - 10:28 AM

LoL what the... are we using series?

### #5

Posted 01 April 2008 - 09:37 PM

Oh... I didn't see that it said FLAT interest? Like on the original principal amount only? That never ever happens!

### #6

Posted 03 April 2008 - 02:15 AM

waaah Annuity (finance theory)?? looool.. using complex numbers to proof waaah Annuity =X

lol let it be simple ^__^