John took advantage of the recent reduction in car prices to purchase his dream car costing RM75,000.
Fantastic news! We've Found the answer you've been seeking!
Question:
John took advantage of the recent reduction in car prices to purchase his dream car costing RM75,000. Bank One offered him a hire-purchase financing (non-amortized loan) on the following terms:
Margin of finance | 80% |
Interest rate | 6.0% flat per annum |
Tenure |
|
- Explain Two (2) benefits of hire-purchase compared to leasing in the case of John.
- Calculate term charges and monthly instalment payment.
- Calculate interest on overdue instalment for the first month, assuming that the number of days overdue is 20 days. Note: Maximum interest rate charged is 8% per annum.
- In addition to the above, assume that John had paid 50 instalments and decided for early settlement of his hire-purchase to facilitate purchase of a new vehicle. Explain the benefit of early settlement of hire-purchase to facilitate. Explain situation where early settlement doesn’t warrant benefit to borrower.
- Compute the outstanding hire-purchase balance, the statutory rebate, overdue interest (if the total number of days in arrears is 150 days) and early settlement amount.
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Posted Date: