Buying on credit: a deposit, then monthly instalments that include interest. CAPS Grade 9 definition, worked example and related financial maths practice.
Buying on credit: a deposit, then monthly instalments that include interest.
Hire purchase lets you take an item home now and pay for it over time. You pay a deposit, and the balance plus simple interest is split into equal monthly instalments, so the total cost is more than the cash price.
A R4 500 phone with a 10% deposit (R450) and 12 instalments of R400 costs R450 + R4 800 = R5 250 in total.
The extra cost of buying on credit here is R5 250 − R4 500 = R750.
Hire purchase is part of the financial maths section of CAPS Grade 9 Mathematics and appears in school tests and the end-of-year exam.
Calculating interest on the full price instead of on the amount still owed after the deposit.
Hire purchase lets you take an item home now and pay for it over time. You pay a deposit, and the balance plus simple interest is split into equal monthly instalments, so the total cost is more than the cash price.
Hire purchase is taught in the financial maths section of CAPS Grade 9 Mathematics and is used again in Grades 10 to 12.
Snap a question that uses hire purchase into Snap&Learn with your grade set to Grade 9, or work through the Grade 9 topic guide and practice papers.
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