Loan Repayments Q (No repayments for 6 mths of time) (1 Viewer)

[Smile12345]

Hello All

Could someone please help me with the following:

'A store offers furniture on hire purchase at 20% p.a. over 5 years, with no repayments for 6 months. Ali buys furniture worth $12000.

What are the monthly repayments?'

Thanks in advance.

 

[Smile12345]

BUmp.

 

[Ikki]

A store offers furniture on hire purchase at 20% p.a. over 5 years, with no repayments for 6 months. Ali buys furniture worth $12000.

What are the monthly repayments?'

That's a rate of 1.2 over 5 years. The 6 months puts a spanner in the works as now you have to consider per month. Basically work with groups of per month. A1=1 Months A2=2 months and so on till A60=5 years at which time A60=0. Follow normal processes and rearrange for repayment. Remember to change values for per month as e.g. rate is in p.a.

 

[Smile12345]

A store offers furniture on hire purchase at 20% p.a. over 5 years, with no repayments for 6 months. Ali buys furniture worth $12000.

What are the monthly repayments?'

That's a rate of 1.2 over 5 years. The 6 months puts a spanner in the works as now you have to consider per month. Basically work with groups of per month. A1=1 Months A2=2 months and so on till A60=5 years at which time A60=0. Follow normal processes and rearrange for repayment. Remember to change values for per month as e.g. rate is in p.a.

Thanks for your help... (sorry I didn't see your reply until now)...

So how do the 6 month without repayments affect the situation???

 

[BLIT2014]

Thanks for your help... (sorry I didn't see your reply until now)...

So how do the 6 month without repayments affect the situation???

I think in exams it is meant to specify if the person pays of the loan during the 6 months or delays payment.

 

[Smile12345]

I think in exams it is meant to specify if the person pays of the loan during the 6 months or delays payment.

Yes, in exams they definitely would....

I was just asking how the 6 months without repayments affects the working out process...

 

[BLIT2014]

You'd have to more per month and not pay during the 6 months so it would impact it!

 

[Smile12345]

You'd have to more per month and not pay during the 6 months so it would impact it!

Yes, I know it will impact it.... HOW does it???!

I know there's more per month but when working out monthly repayments - how do you account for the 6 where you don't pay???