Interest in hire purchase
transaction is charged on cash
price which is
O Outstanding cash price
O Full cash price
O Down payment
0 Instalment
Answers
Answer:
O Full cash price is a answer
Answer:
Instalment
Interest in hire purchase transaction is charged on cash price Instalment.
Explanation:
The total sum that the hirer is obligated to pay the hire vendor in accordance with the hire-purchase contract. This amount is always higher than the cash price of the goods because it also includes interest (also known as finance charges). Thus, the Hire-Purchase Price is equal to the Cash Price plus Interest.
For instance, four additional instalments must be paid in addition to the down payment in a hire purchase transaction. The fourth instalment will be used to calculate interest first, followed by the third, the second, and finally the first instalment.
A hire purchase agreement is one where a large down payment is made and subsequent payments of the remaining balance plus interest are made over a period of time. This contract is enforceable under the law. A down payment is made by a buyer or hirer and represents a portion of the total cash price. The buyer settles the outstanding sum and interest in periodic installments. A financier may also be used to carry out these transactions. The price at which goods may be purchased using cash as payment, also known as the cash price of the goods. The total sum that the hire-purchaser under the agreement must pay is referred to as the hire-purchase price. the price at which goods may be purchased using cash as payment, also known as the cash price of the goods. The total sum that the hire-purchaser under the agreement must pay is referred to as the hire-purchase price.