Subjects finance

Laptop Instalment 470088

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1. **Stating the problem:** Farah wants to buy a laptop with a cash price of 4500. She is offered an instalment plan with a 500 down payment and 20 monthly instalments of 220 each. We need to find: (a) The instalment price. (b) The total interest paid. (c) Which option is better for Farah and why. 2. **Formula and explanation:** - Instalment price = down payment + (number of instalments \times monthly instalment amount) - Total interest paid = instalment price - cash price 3. **Calculations:** (a) Instalment price: $$\text{Instalment price} = 500 + 20 \times 220$$ $$= 500 + 4400$$ $$= 4900$$ (b) Total interest paid: $$\text{Interest} = 4900 - 4500$$ $$= 400$$ (c) Comparison: - Cash price is 4500. - Instalment plan costs 4900 in total. - Instalment plan costs 400 more than cash price. **Conclusion:** The cash purchase is better because it costs less overall and avoids paying 400 extra in interest.