Consumer Arithmetic- Hire Purchase

What we need to know

- Hire purchase cost MORE than cost price
- There is a Downpayment and monthly installments
- The difference between the hire purchase
Price and the cost price is the interest
- This can be represented as a percentage of
The cost price
E.g. A table costs $9000 but is available through a hire
Purchase plan. It requires a down payment of $1500
And 18 monthly instalments of $487.
a. Calculate the difference between to cost price and
The hire purchase price
b. Calculate the interest as a percentage of the cost
Price
Solution:
𝐻𝑖𝑟𝑒 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒 𝑝𝑟𝑖𝑐𝑒 = 𝑑𝑜𝑤𝑛𝑝𝑎𝑦𝑚𝑒𝑛𝑡 + 𝑚𝑜𝑛𝑡ℎ𝑦 𝑖𝑛𝑠𝑡.
= 1500 + (18 × 487)
= 1500 + 8766
= $10266
𝐷𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑐𝑒 = 𝐻𝑖𝑟𝑒 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒 𝑝𝑟𝑖𝑐𝑒 − 𝑐𝑜𝑠𝑡 𝑝𝑟𝑖𝑐𝑒
= 10266 − 9000
= $1266
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 100
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 (𝑎𝑠 𝑝𝑒𝑟𝑐. 𝑜𝑓 𝑐𝑜𝑠𝑡 𝑝𝑟𝑖𝑐𝑒) = ×
𝐶𝑜𝑠𝑡 𝑃𝑟𝑖𝑐𝑒 1
= ×
= 14%
2. A television is bought on hire purchase by making a
Downpayment of $4000 and 12 monthly installments of
$999. If the cost price of the television is $12000
Calculate
i. The difference between the hire purchase and the cost
price
ii. the interest as a percentage of the cost price
Solution:
𝐻𝑖𝑟𝑒 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒 𝑝𝑟𝑖𝑐𝑒 = 𝑑𝑜𝑤𝑛𝑝𝑎𝑦𝑚𝑒𝑛𝑡 + 𝑚𝑜𝑛𝑡ℎ𝑦 𝑖𝑛𝑠𝑡.
= 4000 + (12 × 999)
= 4000 + 11988
= $15988
𝐷𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑐𝑒 = 𝐻𝑖𝑟𝑒 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒 𝑝𝑟𝑖𝑐𝑒 − 𝑐𝑜𝑠𝑡 𝑝𝑟𝑖𝑐𝑒
= 15988 − 12000
= $3988
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 100
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 (𝑎𝑠 𝑝𝑒𝑟𝑐. 𝑜𝑓 𝑐𝑜𝑠𝑡 𝑝𝑟𝑖𝑐𝑒) = ×
𝐶𝑜𝑠𝑡 𝑃𝑟𝑖𝑐𝑒 1
= ×
= 33%
A gaming laptop cost $8999. It can be bought on hire purchase
With a downpayment of $1299 and 15 monthly installments
Of $633.32.
Calculate
i. The difference between the hire purchase and the cost
price
ii. the interest as a percentage of the cost price
Solution:
𝐻𝑖𝑟𝑒 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒 𝑝𝑟𝑖𝑐𝑒 = 𝑑𝑜𝑤𝑛𝑝𝑎𝑦𝑚𝑒𝑛𝑡 + 𝑚𝑜𝑛𝑡ℎ𝑦 𝑖𝑛𝑠𝑡.
= 1299 + (15 × 633.32)
= 1299 + 9899.80
= $10798.80
𝐷𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑐𝑒 = 𝐻𝑖𝑟𝑒 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒 𝑝𝑟𝑖𝑐𝑒 − 𝑐𝑜𝑠𝑡 𝑝𝑟𝑖𝑐𝑒
= 10798.80 − 8999
= $1799.80
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 100
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 (𝑎𝑠 𝑝𝑒𝑟𝑐. 𝑜𝑓 𝑐𝑜𝑠𝑡 𝑝𝑟𝑖𝑐𝑒) = ×
𝐶𝑜𝑠𝑡 𝑃𝑟𝑖𝑐𝑒 1
.
= ×
= 20%

A stove cost $18999. It can be bought on hire purchase

With a downpayment of $4999 and 24 monthly installments
Of $860.40
Calculate
i. The difference between the hire purchase and the cost
price
ii. the interest as a percentage of the cost price
Solution:
𝐻𝑖𝑟𝑒 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒 𝑝𝑟𝑖𝑐𝑒 = 𝑑𝑜𝑤𝑛𝑝𝑎𝑦𝑚𝑒𝑛𝑡 + 𝑚𝑜𝑛𝑡ℎ𝑦 𝑖𝑛𝑠𝑡.
= 4999 + (24 × 860.40)
= 4999 + 20649.60
= $25648.60
𝐷𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑐𝑒 = 𝐻𝑖𝑟𝑒 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒 𝑝𝑟𝑖𝑐𝑒 − 𝑐𝑜𝑠𝑡 𝑝𝑟𝑖𝑐𝑒
= 25648.60 − 18999
= $6649.60
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 100
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 (𝑎𝑠 𝑝𝑒𝑟𝑐. 𝑜𝑓 𝑐𝑜𝑠𝑡 𝑝𝑟𝑖𝑐𝑒) = ×
𝐶𝑜𝑠𝑡 𝑃𝑟𝑖𝑐𝑒 1
.
= ×
= 35%
A couch set cost $9999. It can be bought on hire purchase
With a downpayment of $999.90 and 18 monthly installments
Of $611.05
Calculate
i. The difference between the hire purchase and the cost
price
ii. the interest as a percentage of the cost price
Solution:
𝐻𝑖𝑟𝑒 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒 𝑝𝑟𝑖𝑐𝑒 = 𝑑𝑜𝑤𝑛𝑝𝑎𝑦𝑚𝑒𝑛𝑡 + 𝑚𝑜𝑛𝑡ℎ𝑦 𝑖𝑛𝑠𝑡.
= 999.90 + (18 × 611.05)
= 999.90 + 10998.90
= $11998.80
𝐷𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑐𝑒 = 𝐻𝑖𝑟𝑒 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒 𝑝𝑟𝑖𝑐𝑒 − 𝑐𝑜𝑠𝑡 𝑝𝑟𝑖𝑐𝑒
= 11998.80 − 9999
= $1999.80
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 100
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 (𝑎𝑠 𝑝𝑒𝑟𝑐. 𝑜𝑓 𝑐𝑜𝑠𝑡 𝑝𝑟𝑖𝑐𝑒) = ×
𝐶𝑜𝑠𝑡 𝑃𝑟𝑖𝑐𝑒 1
.
= ×
= 20%

A refrigerator cost $12899. It can be bought on hire purchase

With no downpayment and 24 monthly installments of
$628.83.
Calculate
i. The difference between the hire purchase and the cost
price
ii. the interest as a percentage of the cost price

A total home gym cost $25,499. It can be bought on hire purchase

With a downpayment of $2549.9 and 36 monthly installments
Of $726.01.
Calculate
i. The difference between the hire purchase and the cost
price
ii. the interest as a percentage of the cost price

Algebra
Expanding and simplifying
Eg. Expand and simplify the following
a. 2(𝑥 + 𝑦) + 3(𝑥 + 𝑦)
Solution
2(𝑥 + 𝑦) + 3(𝑥 + 𝑦)
= 2𝑥 + 2𝑦 + 3𝑥 + 3𝑦
= 2𝑥 + 3𝑥 + 2𝑦 + 3𝑦
= 5𝑥 + 5𝑦
b. 3(𝑎 + 𝑏) + 7(𝑎 + 𝑏)
= 3𝑎 + 3𝑏 + 7𝑎 + 7𝑏
= 3𝑎 + 7𝑎 + 3𝑏 + 7𝑏
= 10𝑎 + 10𝑏

Try
1. 2(𝑥 + 𝑦) + 8(𝑥 + 𝑦)
2. 7(𝑥 + 𝑦) − 2(𝑥 + 𝑦)
3. 2(𝑥 − 𝑦) + 3(𝑥 + 𝑦)
4. 4(2𝑥 + 𝑦) + 3(𝑥 + 2𝑦)
5. 3(𝑥 − 2) + 4(𝑥 + 4)
6. −2(3𝑥 + 4𝑦) + 4(𝑥 − 𝑦)
7. 2(𝑥 + 7𝑦) − 3(7𝑥 − 8𝑦)
8. 3(2𝑥 − 2𝑦) − 2(3𝑥 − 3𝑦)
9. 4(−𝑥 + 𝑦) − 5(𝑥 − 𝑦)
10. 3(3𝑥 + 2𝑦) − 4(7𝑥 − 6𝑦)
Solution
1. 2(𝑥 + 𝑦) + 8(𝑥 + 𝑦)
= 2𝑥 + 2𝑦 + 8𝑥 + 8𝑦
= 2𝑥 + 8𝑥 + 2𝑦 + 8𝑦
= 10𝑥 + 10𝑦
2. 7(𝑥 + 𝑦) − 2(𝑥 + 𝑦)
= 7𝑥 + 7𝑦 − 2𝑥 − 2𝑦
= 7𝑥 − 2𝑥 + 7𝑦 − 2𝑦
= 5𝑥 + 5𝑦
3. 2(𝑥 − 𝑦) + 3(𝑥 + 𝑦)
= 2𝑥 − 2𝑦 + 3𝑥 + 3𝑦
= 2𝑥 + 3𝑥 − 2𝑦 + 3𝑦
= 5𝑥 + 𝑦
4. 4(2𝑥 + 𝑦) + 3(𝑥 + 2𝑦)
= 8𝑥 + 4𝑦 + 3𝑥 + 6𝑦
= 8𝑥 + 3𝑥 + 4𝑦 + 6𝑦
= 11𝑥 + 10𝑦
5. 3(𝑥 − 2) + 4(𝑥 + 4)
6. −2(3𝑥 + 4𝑦) + 4(𝑥 − 𝑦)
7. 2(𝑥 + 7𝑦) − 3(7𝑥 − 8𝑦)