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Home > Maths I > Numbers and Money > Hire purchase

Maths I

Hire purchase

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Calculating instalments

Example

The following example shows you how to calculate instalments

The cash price of a bike is £220. The hire purchase price is £300. If the deposit is 10% followed by 10 equal monthly instalments, find the amount you pay each month.

  • First calculate the deposit:

    • Deposit = 10% of £220

    • = £22.00

  • Now we need to calculate the total instalments:

    • Total instalments = H.P price - deposit

    • = £300 - 22

    • = £278

  • Now we can work out what each instalment will be

    • Individual instalments = total instalments ÷ number of instalments

    • = 278 ÷ 10

    • = £27.80

Make a note of the way in which these have been worked out.

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