Mathematics SBA

Group C
Members: Akil Gonzales, Justin Harry, Seifer Rattan, Jerel Sandiford, Darian Warrick

Project title: A research plan into different types types of hire purchase options from various
business establishments across Trinidad and Tobago.

Introduction: Once in a while everyone an item from a store. Sometimes payments may be paid
in full, this is referred to as cash. On the other hand the buyer may choose to enter in an
agreement where by payments can be made in equal monthly installments. This arrangement and
its process is referred to as hire purchase.
A member of our group’s brother is planning to buy a whirlpool washing machine but does not
have the required payment to buy the item. As such he must enter in a hire purchase agreement
with the store. With our knowledge of hire purchase, we will aid him in investigating various
hire purchase plans.

Method of collecting data: Three members from the SBA group would each visit a different
company which has the same model of a whirlpool washing machines. The items will not be
used for the project if there are no hire purchase agreements for them. When the hire purchase
agreements are noted by each student of the group, they will all then be compared to observe
which of the companies provides the best hire purchase deal.
 PRESENTATION OF DATA
The following tables gives information that was collected from four stores: A, B, C, and D

STORE A
TYPE OF PLAN METHOD OF PAYMENT PLAN COST OF
WASHING
MACHINE [$]
CASH ONE-OFF FULL PAYMENT 11,525.99
TYPE OF PLAN METHOD OF REGULAR PRICE COST OF
PAYMENT PLAN [$] WASHING
MACHINE [$]
[A] HIRE 4 MONTHS FOR 14,850.99 16,100.00
PURCHASE CASH
[B]HIRE 2 YEARS AT 14,850.99 17,950.50
PURCHASE REGULAR PRICE
[C]HIRE 25% DOWN 14,850.99 19,450.35
PURCHASE PAYMENT AND 36
MONTHLY
INSTALMENTS
[D]HIRE NO DOWN 14,850.99 18,500.25
PURCHASE PAYMENT AND 24
MONTHLY
INSTALMENTS

STORE B
TYPE OF PLAN METHOD OF PAYMENT PLAN COST OF
WASHING
MACHINE [$]
CASH ONE-OFF FULL PAYMENT 10,500.50
TYPE OF PLAN METHOD OF REGULAR PRICE COST OF
PAYMENT PLAN [$] WASHING
MACHINE [$]
[A]HIRE 4 MONTHS FOR 13,045.00 13,920.00
PURCHASE CASH
[B]HIRE 2 YEARS AT 13,045.00 16,500.85
PURCHASE REGULAR PRICE
[C]HIRE 25% DOWN 13,045.00 19,550.25
PURCHASE PAYMENT AND 36
MONTHLY
INSTALMENTS
[D] HIRE NO DOWN 13,045.00 18,35.10
PURCHASE PAYMENT AND 24
MONTHLY
INSTALMENTS
 STORE C
TYPE OF PLAN METHOD OF PAYMENT PLAN COST OF
WASHING
MACHINE [$]
CASH ONE-OFF FULL PAYMENT 12,500.50
TYPE OF PLAN METHOD OF REGULAR PRICE COST OF
PAYMENT PLAN [$] WASHING
MACHINE [$]
[A]HIRE 4 MONTHS FOR 13,950.00 14,50.00
PURCHASE CASH
[B]HIRE 2 YEARS AT 13,950.00 15,65.80
PURCHASE REGULAR PRICE
[C]HIRE 26% DOWN 13,950.00 17,250.35
PURCHASE PAYMENT AND 36
MONTHLY
INSTALMENTS
[D]HIRE NO DOWN 13,950.00 16,015.99
PURCHASE PAYMENT AND 24
MONTHLY
INSTALMENTS

STORE D
TYPE OF PLAN METHOD OF PAYMENT PLAN COST WASHING
MACHINE [$]
CASH ONE-OFF FULL PAYMENT 13,550.65
TYPE OF PLAN METHOD OF REGULAR PRICE COST OF
PAYMENT PLAN [$] WASHING
MACHINE [$]
[A]HIRE 4 MONTHS FOR 14,550.90 15,300.70
PURCHASE CASH
[B]HIRE 2 YEARS AT 14,550.90 16,750.80
PURCHASE REGULAR PRICE
[C]HIRE 26% DOWN 14,550.90 19,150.50
PURCHASE PAYMENT AND 36
MONTHLY
INSTALMENTS
[D]HIRE NO DOWN 14,550.00 18,500.10
PURCHASE PAYMENT AND 24
MONTHLY
INSTALMENTS
The data from store A will be used to demonstrate the principle of hire purchase plans because
all four stores offer similar payment methods under cash and hire purchase.
Regular price is calculated by marking up 25% of cash price .
Hire purchase is calculated by marking up 5% of every 4 months and then added to regular price

Using Date From Store A.

Calculation of the cost of a washing machine under two different types of plans:

PLAN 1(CASH)
Cash: A one-off full payment of cash price at purchase.
CASH PRICE= $11,525.99

PLAN(HIRE PURCHASE)
Hire Purchase: A, B, C, and D are the four offered hire purchase plans

Plan A: 4 Months of Cash

This consist of regular price plus 5% interest of regular price. 4 months are given to pay off this
plan.
Regular price = $14,407.48
Interest = 5% of regular price
= 5÷100 × $14,407.48 = $720.37
 Cost of washing machine= regular price + interest
= $14,407.48 + $720.37 = $15,127.85
Number of monthly instalments = 4
 Cost of each monthly instalment = cost of set ÷ 4
= $15,127.85 ÷ 4 = $3,781.96

So if this plan is used to purchase the washing machine, my brother would pay
$15,127.85 of four equal monthly instalments of $3,781.96

Plan D: No Down Payment and 24 Monthly Instalments

This consist of regular price plus 30% of regular price. 24 monthly instalments are given to pay
off the washing machine.
Regular price= $14,407.48
Interest = 30% of regular price
= 30÷100 × $14,407.48 = $4,322.24
 Cost of washing machine = Regular price + Interest
= $14,407.48 + $4,322.24 = $18,729.72
 Number of monthly instalments = 24
 Cost of each monthly instalment = cost of set ÷ 24
= $18,729.72 ÷ 24 = $780.40

So if this plan is used to purchase the washing machine, my brother would pay
$18,729.72 in total spread out between 24 equal monthly installments of $780.40
Analysis of data

Each hire purchase plan will now be analyzed and compared to its cash price in order to
see cost effectiveness.

Hire purchase plan A:

Hire purchase price of washing machine = $15,127.85
Regular price of washing machine = $14,407.48
Difference in price = ($15,127.85 - $14,407.48)

Therefore, for plan A, the customer pays $720.37 more than the regular price.
This difference as a percentage = 720/14,407.48 * 100%
= 4.99%

Hire purchase plan D:

Hire purchase price of washing machine = $18,729.72
Regular price of washing machine = $14,407.48
Difference in price = ($18,729.72 - $14,407.48)

Therefore, for plan D, the customer pays $4,332.24 more than the regular price.
This difference as a percentage = 4,332.24/14,407.48 * 100%
= 29.99%