The cash price of a television set is $350 when bought on hire purchase
To calculate the cash price of a television set when bought on hire purchase, you need to know the hire purchase price and the hire purchase interest rate.
1. Determine the hire purchase price: This is the total price of the television set, including any down payment and installment fees. Let's assume the hire purchase price is $400.
2. Calculate the hire purchase interest rate: The interest rate is the additional cost you will pay for using hire purchase instead of buying the TV outright. Let's assume the hire purchase interest rate is 5%.
3. Determine the duration of the hire purchase: This is the length of time over which you will be making installment payments. For this example, let's assume the duration is 12 months.
4. Calculate the total interest paid: Multiply the hire purchase price by the hire purchase interest rate to find the total interest paid. In this case, $400 * 0.05 = $20.
5. Subtract the total interest paid from the hire purchase price: Deduct the total interest paid from the hire purchase price to find the actual cash price. $400 - $20 = $380.
Therefore, the cash price of the television set bought on hire purchase in this case would be $380.