A car is purchased on hire-purchase. The cash price is $21 000 and the terms are a deposit of 10% of the price, then the balance to be paid off over 60 equal monthly instalments. Interest is charged at 12% p.a. What is the monthly instalment?
Correct Answer: $504
Explanation:
Cash price = $21 000
Deposit = 10% × $21 000 = $2100
Loan amount = $21000 − $2100 = $18900
I=p x r x t/100
I=11340
Total amount = 18900 + 11340 = $30240
Regular payment = total amount /number of payments
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