Hire Purchase Flashcards
What is Hire Purchase?
In Hire Purchase, there are 2 parts in the purchase
The Downpayment (or deposit) and Installment
What is Downpayment or Deposit
It the initial amount you pay when you make a purchase, which is usually a small amount compared to the actual price
$170
What is installment
It is the amount that is paid in equal amounts and on a regular basis
$30 * 24 = $720
How much does he pay by Hire Purchase
Hire Purchase = $170 + $30 * 24
$890
Why is there a difference in the Hire Puchase price and cash price?
The Hire Purchase allows the buyer to pay small amounts at a time, however he has a higher price to pay.
Deposit is $50
Installment is $20 for 12 months
What is the Hire Purchase amount
Hire Purchase = $50 + $20 * 12
= $290
Deposit is $400
Installment is $150 monthly for 1 year
What is the Hire Purchase amount
Hire Purchase = $400 + $150 * 12
= $2200
Deposit is $200
Installment is $150 monthly for 2 year
What is the Hire Purchase amount
Hire Purchase = $200 + $150 * 24
= $3800
Hire Purchase is $2000
Installment is $120 monthly for 12 months
What is the Deposit?
Deposit = $2000 - $120 * 12
= $560
Hire Purchase is $2000
Deposit is $200
What is the Installment per month if payment is made over 12 months
Installment = ($2000 - $200)/12
= $1800/12
= $150
