If a TV set is bought on the installment plan there is a down payment of $25 and 12 monthly payments of $15 each. The same set may be bought for cash at 12% less than the installment price. The amount saved by making a cash payment is:
Mr.themba bought on an instalment plan a Sony digital home theatre system for which the cash price was $ 3699.00.he paid $459.40 as a down payment and then made 12 monthly payments of $ 387.10 each.
To find the amount saved by making a cash payment, we can calculate the installment price and the cash price of the TV set and then find the difference between the two.
Given information:
- Down payment on installment plan: $25
- Monthly payments on installment plan: $15 for 12 months
- Cash price discount: 12%
Step 1: Calculate the installment price.
The installment price is the total amount paid over the 12 monthly payments. The down payment is made upfront and is not included in the installment price. So, the installment price can be calculated as follows:
Installment price = (12 monthly payments) x (monthly payment amount)
= 12 x $15
= $180
Step 2: Calculate the cash price.
The cash price is the price of the TV set after the 12% discount. Let's calculate the discount amount first:
Discount amount = 12% of installment price
= 0.12 x $180
= $21.60
Cash price = Installment price - Discount amount
= $180 - $21.60
= $158.40
Step 3: Calculate the amount saved by making a cash payment.
The amount saved by making a cash payment is the difference between the installment price and the cash price.
Amount saved = Installment price - Cash price
= $180 - $158.40
= $21.60
Therefore, the amount saved by making a cash payment is $21.60.