Calculating instalments

The following example shows you how to calculate instalments:

Example

The cash price of a bike is \pounds220. The credit agreement price is \pounds300.

If the deposit is 10\% followed by ten equal monthly instalments, find the amount you pay each month.

First calculate the deposit:

Deposit = 10\% of \pounds220

= \pounds22

Total still to be paid by instalments = credit agreement price - deposit

= 300 - 22

= \pounds278

As there are to be 10 equal instalments we divide this by 10.

Each instalment = \frac{{278}}{{10}} = \pounds27.80