Subjects algebra

Hire Purchase Cost

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1. **State the problem:** A water pump costs 12800 cash. A farmer buys it on hire purchase by paying a deposit of 5000 and four monthly instalments of 2600 each. We need to find how much more the farmer paid than the cash price. 2. **Formula and explanation:** Total amount paid on hire purchase = Deposit + (Number of instalments \times Instalment amount). 3. **Calculate total instalments:** $$4 \times 2600 = 10400$$ 4. **Calculate total amount paid:** $$5000 + 10400 = 15400$$ 5. **Calculate how much more than cash price:** $$15400 - 12800 = 2600$$ 6. **Conclusion:** The farmer paid 2600 more than the cash price for the water pump.