A dealer marks the price of a computer at UGX4800,000. If he charges 15% higher under the hire purchase scheme with a deposit of UGX 1200000 and six equal monthly installments, calculate the amount of money to be paid in each month's installment.

The amount to be paid in each month's installment under the hire purchase scheme is UGX 720,000. This is calculated by determining the hire purchase price, subtracting the deposit, and dividing the remaining amount by the number of installments. The hire purchase price is UGX 5,520,000, and after the deposit, UGX 4,320,000 is financed over six months.
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Answered by Anonymous | 2025-07-07

Calculate the hire purchase price: 4 , 800 , 000 + ( 0.15 × 4 , 800 , 000 ) = 5 , 520 , 000 .
Subtract the deposit: 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 multiply the marked price by 15% (0.15) and add it to the original marked price.

Calculating the Hire Purchase Price The calculation for the hire purchase price is as follows: H i re _ P u rc ha se _ P r i ce = M a r k e d _ P r i ce + ( 0.15 × M a r k e d _ P r i ce ) H i re _ P u rc ha se _ P r i ce = 4 , 800 , 000 + ( 0.15 × 4 , 800 , 000 ) H i re _ P u rc ha se _ P r i ce = 4 , 800 , 000 + 720 , 000 H i re _ P u rc ha se _ P r i ce = 5 , 520 , 000 So, the hire purchase price is UGX 5,520,000.

Calculate the Remaining Amount 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 calculation for the remaining amount is: R e mainin g _ A m o u n t = H i re _ P u rc ha se _ P r i ce − De p os i t R e mainin g _ A m o u n t = 5 , 520 , 000 − 1 , 200 , 000 R e mainin g _ A m o u n t = 4 , 320 , 000 So, the remaining amount is UGX 4,320,000.

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

Calculating the Monthly Installment The calculation for the monthly installment is: M o n t h l y _ I n s t a ll m e n t = N u mb er _ o f _ I n s t a ll m e n t s R e mainin g _ A m o u n t ​ M o n t h l y _ I n s t a ll m e n t = 6 4 , 320 , 000 ​ M o n t h l y _ I n s t a ll m e n t = 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 home appliances, the dealer often offers a hire purchase option. By calculating the total cost, including interest and installments, you can compare it with other payment methods like cash or loans. This helps you make an informed decision, ensuring you choose the most cost-effective and manageable payment plan for your budget. For example, if a refrigerator costs UGX 2,000,000 and the hire purchase plan increases the cost by 20% with a deposit of UGX 500,000 and 12 monthly installments, you can calculate each installment to see if it fits your monthly budget.

Answered by GinnyAnswer | 2025-07-07