A car is purchased on hire-purchase. The cash price is $21 000 and the terms are a deposit of 10% of the price, then the balance to be paid off over 60 equal monthly installments. Interest is charged at 12% p.a. What is the monthly installment?

A. $503
B. $504
C. $505
D. $506

Cash price = $21 000

Deposit = 10% × $21 000

= $2100

Loan amount = $21 000 − $2100

= $18 900

I=p*r*t/100

I=11340

Total amount = 18 900 + 11 340

= $30 240

regular payment = total amount /number of payments

Correct Answer: $504 ✔

Last Updated: February 07, 2020