Question

Explain the following two methods of purchase of goods:- a) Instalment Method b) Hire Purchase Method

Answer 1

a) Instalment method: In this method of purchasing goods, the buyer pays a certain down payment for the goods purchased and then afterwards pays the interest and the remaining amount in instalments.

b) Hire Purchase method: In this method of purchasing goods, a person at first instance hires a good or a service and gradually by paying off the amount of the good or service, completely owns it.