Question

The marked price of a laptop is Kshs. 60,000. A customer buys it at shs. 73500 on hire purchase terms. If the deposit paid is Kshs. 7500 and an interest of 22½% p.a is charged on the balance. Calculate the number of months it takes to clear the balance.

Answer 1

A=73500 −7500 = Ksh.66,000
P=60000−7500=Ksh.52,500
66,000−52,500(1+^20.5/₁₀₀)ⁿ
 1.2571 =  (1.225)ⁿ
         n=log 1.2571
              log 1.225
        n=1.13yrs
      ∴ n= 13 months