Question

installment payment system and hire ​

Answer 1

The monthly or period payment in installment purchase is termed as installment whereas, in hire purchase arrangement, it is called hire charges. Installment derives its value from the length of time, the sale value of an asset, and interest rate whereas the hire charges is a function of two additional factors viz.

Answer 2

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• The Installment system is almost similar to the hire purchase system.

• The main difference between the two is that in installment system, the buyer gets the ownership rights as soon as the contract is signed with the seller.