Name:

Gr 10 Date: Time: 1 HR
CAPS Reference
Finance & Growth
Topic Hire Purchase and Population Growth

1. GOT IT! [5 MIN]

Hire purchase allows you to buy and object and pay it off over a period of time. We make use
of the Simple Interest formula to calculate hire purchase.

Formula: 𝑨𝑨 = 𝑷𝑷 ( 𝟏𝟏 + 𝒊𝒊×𝒏𝒏)
𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹
𝐴𝐴 = 𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎
𝑃𝑃 = 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎
𝑟𝑟
𝑖𝑖 = 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖 −>
100
𝑛𝑛 = 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑖𝑖𝑖𝑖 𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦

Example 1:

You want to buy a fridge. Pick and Pay advertise a 220lt fridge for 𝑅𝑅12 999, or you can get it
on hire purchase. The hire purchase contract states that you have to pay a 10% deposit, and
monthly payments at an interest rate of 15% p.a for three years.
a) Determine the total price of the hire purchase contract.
b) Determine the monthly payments.

Answer:
a) Deposit To answer a) you first have to
10 determine principal amount.
𝑅𝑅12 999 × = 1 299,90
100 The principal amount is
determined by calculating the
Amount after the deposit (principal amount) deposit and subtracting it from
𝑅𝑅12 999 − 1 299,90 = 𝑅𝑅11 699,10 the original amount
Hire purchase – Simple interest
𝐴𝐴 = 𝑃𝑃(1 + 𝑖𝑖×𝑛𝑛)
15 𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹
𝐴𝐴 = 11 699,10 �1 + ×3�
100 𝐴𝐴 = ? 𝑃𝑃 = 𝑅𝑅11 699,10
𝐴𝐴 = 11 699,10(1,45)
𝐴𝐴 = 𝑅𝑅16 963,70 15
𝑖𝑖 = 𝑛𝑛 = 3
∴ 𝑅𝑅16 963,70 + 1 299,90 = 𝑅𝑅18 263,60 100

𝑅𝑅16 963,70
b) = 𝑅𝑅471,21
36

2. GO AHEAD [15 MIN]

2.1 Sam buys a car on hire purchase. The selling price of the car is 𝑅𝑅250 000; he gets an
offer to have a monthly payment with no deposit at an interest rate of 14,8% p.a.
for a total of 60 months. Determine the monthly payment.

2.2 Frank would like to buy a Samsung TV; the hire purchase contract states that he will
need to pay a monthly fee of 𝑅𝑅486 per month for the next 3 years. If the interest
rate is 11% p.a, calculate the selling price of the Samsung TV.

2.3 Michelle is interested in getting a cell phone. The following two quotes were sent to
her.
Quote Cash Hire Purchase
1 𝑅𝑅 7 999 𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷 − 5%
𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 − 10% 𝑝𝑝. 𝑎𝑎
𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 – 2 𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦

2 𝑅𝑅 7 999 𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷 – 0%
𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 – 14%
𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 – 2 𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦
2.3.1 Determine the total hire purchase price of quote 1.
2.3.2 Determine the total hire purchase price of quote 2.
2.3.3 Which quote do you think Michelle should consider?

3. CHECK YOUR WORK! [10 MIN]

4. GOT IT! [5 MIN]

Population growth is the increase or decrease in the number of people who reside in a country
or state. We make use of the Compound Interest formula to calculate population growth.

Formula: 𝑨𝑨 = 𝑷𝑷 ( 𝟏𝟏 + 𝒊𝒊)𝒏𝒏
𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹
𝐴𝐴 = 𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎
𝑃𝑃 = 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎
𝑟𝑟
𝑖𝑖 = 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖 −>
100
𝑛𝑛 = 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑖𝑖𝑖𝑖 𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦

Example 1:

Cape Town’s current population stands at 4 778 966. The average rate the population growth
is 1,9% p.a. Calculate the population growth of Cape Town in two years’ time.

Answer:
𝐴𝐴 = ? 𝑃𝑃 = 4 778 966
𝐴𝐴 = 𝑃𝑃 ( 1 + 𝑖𝑖)𝑛𝑛
1,9
1,9 2 𝑖𝑖 = 𝑛𝑛 = 2
𝐴𝐴 = 4 778 966 � 1 + � 100
100
𝐴𝐴 = 4 962 291,915
∴ 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤 ℎ𝑎𝑎𝑎𝑎𝑎𝑎 𝑎𝑎 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑜𝑜𝑜𝑜 4 962 292 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝

5. GO AHEAD [15 MIN]

5.1 Johannesburg’s population has grown to a total of 3 899 212. If the average
population growth is 2,3% p.a., determine the population of Johannesburg in 4
years’ time.

5.2 The population in Durban for the past 10 years has increased from
2 653 420 to 3 600 747. Calculate the interest rate of the population growth of
Durban.
5.3 Polokwane had a total of 628 999 people in the year 2010. They had a steady
 population growth of 1,7% for 4 years. In the past two years there has been an
increase from 1.7% to 2,1%. Determine the total growth of Polokwane at the end
of 2016.

6. CHECK YOUR WORK! [10 MIN]