Sussex buys a car on hire purchase. The car cost R130000. She pays a 10% deposit on the cash price and will have to pay monthly instalments of R4600 for three years. David buys the same car but chooses another option where he has to pay a 35% deposit on the cash price and monthly instalments of R3950 for two years. Calculate the hire purchase price for both options
1. Sussex's hire purchase price:
- Deposit: 10% of R130000 = R13000
- Amount financed: R130000 - R13000 = R117000
- Monthly instalment: R4600
- Total instalments for three years: 36 (3 years * 12 months)
Total amount paid over three years: R4600 * 36 = R165600
- Hire purchase price: Deposit + Total instalments = R13000 + R165600 = R178600
2. David's hire purchase price:
- Deposit: 35% of R130000 = R45500
- Amount financed: R130000 - R45500 = R84500
- Monthly instalment: R3950
- Total instalments for two years: 24 (2 years * 12 months)
Total amount paid over two years: R3950 * 24 = R94800
- Hire purchase price: Deposit + Total instalments = R45500 + R94800 = R140300
Therefore, the hire purchase prices for Sussex and David's options are R178600 and R140300, respectively.