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irakobra [83]
3 years ago
10

Elisa buys a violin, which costs $2200, through a hire purchase agreement. Under the agreement, she

Mathematics
1 answer:
Colt1911 [192]3 years ago
7 0

Answer:

-$860

-58.64%

Step-by-step explanation:

Given the cash price as $2200, the down payment as $500 and monthly installments of $320 for 8 months, the interest charged is calculated as;

Interest=Hire \ Purchase \ Price -Cash \ Price\\\\=(500+320\times8)-2200\\\\=3060-2200\\\\=860

Hence, the interest charged is $860

#Flat rate of interest is similar to simple interest rate.

Knowing n=8 months and interest as $860, the rate is calculated as:

I=P\times i \times n  \ \ \ \ \n=8/12 \ ,P=2200\\\\860=2200i\times \frac{8}{12}\\\\i=0.5864

Hence, the flat rate of interest over the 8 months is 58.64%

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