Question

Mr smith buys a settee on hire purchase. He pays $600 deposit and 12 equal monthly payment of $250. The cash price of the settee is $2700.

What is the hire purchase price?

What percentage is the deposit of the hire purchase price?

Answer 1

After paying his deposit the balance is $2700-600=$2100. 12 monthly payments of $500=$6000.

So he will have paid 600+6000=$6600 for the settee, the hire purchase price.

The percentage of the deposit over the hire purchase price is 600/6600=1/11=9.1% approx. The deposit is 9.1% of the HP price.