Page 252 - Accountancy_F5

Solution 8.3
Hire purchase interest TZS

Hire purchase price 13,020,000
Less: Cash price 12,400,000

Hire purchase interest 620,000
FOR ONLINE READING ONLY
(a) Number of instalments to be apportioned with interest is 4:

LANGUAGE EDITING
1
nn + h
^
Sum of digits =
2
LANGUAGE EDITING
1
44 + h
^
= = 10
2
HP Interest payable per instalment is calculated as follows:
Hire purchase interest per
Digit Digit assigned/
Date instalment
assigned Sum of digits
TZS
31 December 2022 4 4 = 620,000# 4 = 248 ,000
st
10 10
31 December 2023 3 3 = 620,000# 3 = 186 ,000
st
10 10
31 December 2024 2 2 = 620,000# 2 = 124 ,000
st
10 10
31 December 2025 1 1 = 620,000# 1 = 62 ,000
st
10 10
Total 620,000

(b) If the first instalment is paid together with the down payment, then, the remained
number of instalments to be charged interest becomes three (3) instead of four (4).
Hence, the sum of digits will be:

1
1
^
nn + h 33 + h
^
Sum of digits = = = 6
2 2

Student’s Book Form Five
239

23/06/2024 17:36
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