Agreement to pay deposit of 20%


Question 1:

A student buys a TV set of R11 000 on a hire purchase agreement. He agrees to pay a deposit of 20% and the balance over a period of two years in monthly instalments at 14% simple interest p.a. He also takes out an insurance premium of R18,50 per month. Determine the amount of each instalment.

Question 2:

Mikayla wants a new Polaroid camera. It costs R1 750, but her parents said she must buy it herself. She finds out that Hot Gadgets has a hire purchase contract at 11.5% interest for 3 years. She will need to pay a 15% deposit.

2.1 What will she have paid at the end of 2 years in total?

2.2 Calculate the monthly instalments.

2.3 After some more research on the internet, she saw that Amazon sells one at $95. But she needs to pay the shipping fees of $15 as well.

What will the camera cost if the Rand/Dollar exchange rate is R13,99 per dollar? Take the shipping cost into consideration when calculating your answer.

2.4 Which option would be the best financially for Mikayla? Amazon or Hot Gadgets? Give a reason for your answer.

2.5 What will the cost of the camera be in 5 years if the inflation rate is 7,2 % per year? (use the Hot Gadgets amount)

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