A dealer marks the price of a computer at UGX 4,800,000. If he charges 15% higher under the hire purchase scheme with a deposit of UGX 1,200,000 and six equal monthly installments, calculate the amount of money to be paid in each month's installment.

Calculate the hire purchase price by adding 15% to the marked price: 4 , 800 , 000 + ( 0.15 × 4 , 800 , 000 ) = 5 , 520 , 000 .
Subtract the deposit from the hire purchase price: 5 , 520 , 000 − 1 , 200 , 000 = 4 , 320 , 000 .
Divide the remaining amount by the number of installments: 6 4 , 320 , 000 ​ = 720 , 000 .
The amount to be paid in each monthly installment is 720 , 000 ​ .

Explanation

Calculate the Hire Purchase Price First, we need to determine the hire purchase price of the computer. The dealer charges 15% higher than the marked price of UGX 4,800,000. To calculate this, we find 15% of UGX 4,800,000 and add it to the original price.

Calculating the Total Hire Purchase Price The calculation for the hire purchase price (H) is as follows: H = Marked Price + ( Percentage Increase × Marked Price ) H = 4 , 800 , 000 + ( 0.15 × 4 , 800 , 000 ) H = 4 , 800 , 000 + 720 , 000 H = 5 , 520 , 000 So, the hire purchase price is UGX 5,520,000.

Subtract the Deposit Next, we need to subtract the deposit of UGX 1,200,000 from the hire purchase price to find the remaining amount to be paid in installments.

Calculating the Remaining Amount The remaining amount (R) is calculated as: R = Hire Purchase Price − Deposit R = 5 , 520 , 000 − 1 , 200 , 000 R = 4 , 320 , 000 So, the remaining amount to be paid in installments is UGX 4,320,000.

Calculate the Monthly Installment Amount Now, we divide the remaining amount by the number of equal monthly installments, which is 6, to find the amount of each installment.

Determining the Monthly Installment The amount of each monthly installment (I) is calculated as: I = Number of Installments Remaining Amount ​ I = 6 4 , 320 , 000 ​ I = 720 , 000 Therefore, the amount to be paid in each monthly installment is UGX 720,000.

Final Answer Therefore, the amount of money to be paid in each month's installment is UGX 720,000.


Examples
Understanding hire purchase schemes is crucial in everyday financial planning. For instance, when buying a car or electronic appliances, the dealer often provides options for paying in installments. By calculating the total cost, including interest and deposits, you can determine the monthly payments and assess whether the purchase fits your budget. This ensures you avoid unexpected financial strain and make informed decisions about long-term payment plans.

Answered by GinnyAnswer | 2025-07-07

The amount to be paid in each month's installment under the hire purchase scheme is UGX 720,000. This is calculated after initially adding a 15% markup to the marked price and subtracting the deposit. The remaining balance is then divided by the total number of installments.
;

Answered by Anonymous | 2025-07-14