Philani bought a scooter for R15 000. He paid 15% of the amount in cash and signed a hire-prchase agreement to pay the balance in 24 equal monthly installments. The interest rate is 10% per annum.How much did he pay in cash? Calculate the total amount that he must still pay

Answer 1

Philani paid 15% of R15 000 in cash, which is:

0.15 x 15 000 = R2 250

Therefore, Philani still owes:

15 000 - 2 250 = R12 750

To calculate the monthly installments, we need to first calculate the total amount with interest. The interest rate is 10% per annum, so over 24 months it will be:

10/100 x 12/12 x R12 750 = R1 275

Therefore, the total amount Philani must still pay with interest is:

R12 750 + R1 275 = R14 025

To calculate the monthly installment, we divide the total amount with interest by the number of months:

R14 025 / 24 = R584.38

Therefore, Philani paid R2 250 in cash and still owes a total of R14 025, which he will pay in 24 monthly installments of R584.38 each.