Understanding Higher Purchase Agreements

This video tutorial introduces hire purchase agreements, explaining them as short-term loans allowing buyers to acquire items before full payment. It covers the calculation of costs using simple interest rates, with examples including a lawn mower and a bed purchase. The video highlights the importance of understanding hidden costs and provides additional resources for further learning.

What is a higher purchase agreement?

• A method of buying stocks

• A short-term loan allowing purchase before full payment

• A type of insurance policy

• A long-term loan for buying property

Which of the following is commonly bought on higher purchase agreements?

• Books

• Groceries

• Clothing

• Household appliances

How is the interest on a higher purchase agreement typically calculated?

• Compound interest

• Simple interest

• No interest

• Variable interest

What is the purpose of a deposit in a higher purchase agreement?

• To serve as an upfront payment

• To reduce the interest rate

• To increase the total loan amount

• To eliminate monthly payments

In the lawn mower example, what was the initial cash price of the mower?

• 15,041 Rand

• 13,890 Rand

• 10,870 Rand

• 9,783 Rand

What was the interest rate applied to Ruan's higher purchase agreement?

• 16%

• 14%

• 12%

• 10%

How much was Ruan's monthly repayment before insurance?

• 400 Rand

• 397.89 Rand

• 350 Rand

• 385.89 Rand

What additional monthly cost did Ruan incur for insurance?

• 10 Rand

• 15 Rand

• 20 Rand

• 12 Rand

What is the total cost Ruan paid for the lawn mower including the deposit?

• 14,324 Rand

• 15,041 Rand

• 16,000 Rand

• 13,890 Rand

How long was the repayment period for the lawn mower?

• 5 years

• 2 years

• 3 years

• 4 years