Question

Each HP instalment amount is made up of ______.

Part payment towards cash price only

Part payment towards interest only

Part payment towards cash price + interest

Part instalment payment only

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Answer 1

HHP installment amount is made of part payment towards interest only

Answer 2

Answer: Part payment towards cash price + interest

Step-by-step explanation: We know that the hire-purchase price consists of two elements: (i) cash value; and (ii) interest. Cash value is an expense incurred for the acquisition of an asset for payment of the capital (principal) amount and (ii) an expense in the nature of revenue for the delay in making full payment of interest.

As the Part payment towards cash price + interest.

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