A consumer makes a $400 down payment on a television that costs $1,570. Which of the following is the number of months it will take to pay off the television with monthly payments of $100? (Assume that no interest is owed)
12
16
15
11
Correct Answer : A
Hire purchase cost=down payment + total monthly installment
Total monthly payment=hire purchase cost-down payment= $(1570-400)=$ 1170
Number of months=total monthly payment/monthly payment=$1170/$100=11.7 months
The consumer will clear the balance in 12 months.
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