Sometimes an item is bought or paid for over a period of time. The customer pays a deposit or down payment and the balance are paid weekly or monthly (called installments). This payment arrangement is referred to as hire purchase.
Price: $4200 | or Deposit: $1000 , HP: 12 monthly payments of $350
Marsha bought a stove on hire purchase. How much would she pay for the stove instead.
Balance owing = $4200 – $1000 = $3200
Total monthly payment = $350 x 12 = $4200
Total payment = $3200 + $4200 = $7400
Thus, Marsha will pay $7400.