answersLogoWhite

0

Hire purchase is calculated using the simple interest formula, and interest is only calculated on the amount owing.

A = S ( 1 + i.n)

Where:

A = Total amount after interest

S = Starting amount after deposit has been subtracted (no interest)

i = Interest rate (divide the % by 100, and then again by 12, 4, or 6 depending on the number of times interest will be calculated)

n = number of time periods that the purchase agreement states to pay over (24 months, etc)

Substituting the given values into the formula will give you the total amount to be paid after interest has been accrued.

To calculate the repayments, you divide the answer derived as A (total amount) by the number of repayments (n) you have to make.

It is a really simple process, and it will only ever use the simple interest formula.

Hope this was helpful ^^

User Avatar

Wiki User

12y ago

What else can I help you with?

Related Questions

How do you do the formula to find hire purchase in mathematics?

number of months multiplied by amount of deposits


When was the Origin or development of hire purchase?

origin and development of hire purchase


What are the advantages of hire purchase as a source of finance?

Hire purchase can give the good profit,


Advantage of hire purchase?

One advantage of hire process is that it allows low-income individuals to purchase items that would otherwise be out of their budget. Hire purchase is also known as installment plan.


What means repossesion as regard to hire purchase?

If a company fails to make it's repayment under the hire purchase agreement then the loan providers can tale the goods bought under the hire purchase as settlement for the loan.


Why would a company use hire purchase?

The legal term for hire purchase is a contract. Companies may prefer using hire purchase because it spreads the costs of expensive items over a period of time.


What is the explanation for the features of hire purchase system?

higher purchase


Solve you a problem on hire purchase system?

caluculation of intrest under hire purchase system


What is the meaning of hp?

Hire Purchase


Hire purchase?

Paying in instalments


What is the adjective for hire?

The verb to hire has the participle adjectives hiring and hired. For the noun hire, it can be used as a noun adjunct (hire car, hire purchase).


Is hire purchase classed as unsecured debt?

No, hire purchase is generally considered a form of secured debt. In a hire purchase agreement, the item being financed acts as collateral, meaning the lender can reclaim it if the borrower fails to make payments. This security for the lender distinguishes hire purchase from unsecured debt, where there is no collateral backing the loan.

Trending Questions
What is a mini USB car charger? What services are offered by NHS Fleet Solutions? How do you unprogram garage door opener on a sonata? What instrument measures distance travelled by a vehicle? In the primary ignition circuit the negative terminal on the coil is connected to? Will homeowners policy cover replacement of driveway culvert? Can you compare car insurance with multiple companys at once? Is the Parkers Car Guide available online? I accidentally bumped into the back of someone's car today and no damage was done to my car of hers Not even a scratch and i have pictures Can she still make me pay even if no damage was done? How full do you fill the rear end in an 1987 EZGO golf cart? Different between JG Gearbox Version 2 and Version 3? If an automobile uses 0.05 milliliters of oil for each kilometer it is driven how much oil in liters is consumed if the automobile is driven 20000 km? WHY USCall us now-203 999 1526We offer airport transfers service in Neywork and our limousines are packed with luxurious features, late model and clean!Looking for an unbeatable limo hire in Danbury? What is goodman air condition model GSH130301ab tonage? Why is there a burning smell when the heat has been on for a while? What do you name a person who renovates cars? How Does Society Benefit From The Car? How many 1969 dodge coronet 500 convertibles with automatic were built? What is the best cleaner for fuel injection cleaning? How many quarts does it take to fill a differential on a 88 Toyota pickup 4x4?