Use the information above to answer the questions that follow: 1. Give TWO payment options for this generator. 2. Define hire-purchase within the given context. 3. Write down th... Use the information above to answer the questions that follow: 1. Give TWO payment options for this generator. 2. Define hire-purchase within the given context. 3. Write down the interest rate if the generator was bought on hire-purchase. 4. Calculate the total cost of the generator using Mobicred. 5. A 12,5% discount is given on the cash price. Calculate the amount of discount given if the generator is purchased for cash. 6. Name the type of interest charged if the generator is bought on hire-purchase.
Understand the Problem
The question provides information about the payment options for a generator and asks several questions related to those options. These include identifying the payment types, defining a term, extracting an interest rate, calculating the total cost using a specific payment method, calculating a discount, and identifying the type of interest charged.
Answer
1.1.1 Cash price, Hire-purchase 1.1.2 Paying a deposit and installments, including interest, with ownership transferring after final payment. 1.1.3 14,75% 1.1.4 R12 072 1.1.5 R1 374,88 1.1.6 Simple interest
Answer for screen readers
1.1.1 Cash price, Hire-purchase, Online credit (via Mobicred) 1.1.2 A method of buying where you pay a deposit and then pay monthly installments, including interest, over a set period. You only own the generator after all payments are made. 1.1.3 14,75% 1.1.4 R12 072 1.1.5 R1 374,88 1.1.6 Simple interest
Steps to Solve
- Identify two payment options
Read the heading "PAYMENT OPTIONS OF A GENERATOR" and list any two of the presented options.
- Define hire-purchase in the given context
Understand that hire-purchase is a method of buying something by paying for it in installments. In this context, explain that the buyer pays a deposit and then repays the remaining amount in installments over a specific period, including interest. The buyer only gains ownership after all payments are made.
- Write down the interest rate for hire-purchase
Locate the "Hire-purchase" payment option and read the interest rate associated with it.
- Calculate the total cost using Mobicred
Multiply the monthly installment amount for Mobicred by the number of months specified. $Total\ Cost = Monthly\ Installment \times Number\ of\ Months$ $$Total\ Cost = R1\ 006 \times 12$$
- Calculate the discount amount
Calculate 12.5% of the cash price, R10 999. $Discount = Cash\ Price \times Discount\ Percentage$ $$Discount = R10\ 999 \times 12.5% = R10\ 999 \times 0.125$$
- Name the type of interest charged
With hire purchase, you pay interest on the amount you still owe, also known as simple interest.
1.1.1 Cash price, Hire-purchase, Online credit (via Mobicred) 1.1.2 A method of buying where you pay a deposit and then pay monthly installments, including interest, over a set period. You only own the generator after all payments are made. 1.1.3 14,75% 1.1.4 R12 072 1.1.5 R1 374,88 1.1.6 Simple interest
More Information
The total cost of the generator using Mobicred is calculated as: $R1\ 006 \times 12 = R12\ 072$. The discount amount is found by multiplying the cash price by the discount percentage: $R10\ 999 \times 0.125 = R1\ 374,875$. Rounding this to two decimal places gives $R1\ 374,88$.
Tips
- Forgetting to include the deposit when calculating the total cost of hire-purchase.
- Incorrectly calculating the percentage discount (e.g., calculating 1.25% instead of 12.5%).
- Not understanding the definition of hire-purchase.
- Confusing the interest rates for different payment options.
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