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Mrs Smith would like to buy a car but does not have the full cash amount - NSC Mathematical Literacy - Question 2 - 2021 - Paper 1
Question 2
Mrs Smith would like to buy a car but does not have the full cash amount. She downloaded TWO payment options for TWO different cars as shown in TABLE 2 below. TABLE... show full transcript
Worked Solution & Example Answer:Mrs Smith would like to buy a car but does not have the full cash amount - NSC Mathematical Literacy - Question 2 - 2021 - Paper 1
Step 1
2.1.1 State what type of payment option is shown in TABLE 2.
Answer
The type of payment option shown in TABLE 2 is a hire purchase agreement or installment payment. This involves paying for the car in monthly installments, with an initial deposit and a residual value at the end of the term.
Step 2
Step 3
Step 4
2.1.4 Which ONE of the two vehicles will be more cost effective in terms of monthly budget?
Answer
To determine which vehicle is more cost-effective, compare the monthly installments:
- Ford Figo: R2 999.00
- VW Polo: R3 345.00
The Ford Figo has a lower monthly installment amount, thus it is more cost-effective.
Step 5
2.1.5 Calculate the total cost of the VW Polo if the monthly installment remained the same throughout the contract period, except for the final payment.
Answer
To calculate the total cost of the VW Polo:
Total Cost = (Monthly Installment × Number of Months) + Admin Fees + Residual Value
Total Cost = (R3 345 × 48) + R116.76 × 48 + Residual Value = R160 560 + R5 604 + (R220 300 × 20%) = R160 560 + R5 604 + R44 060 = R210 224.