Question

A sofa costs £1099. The shop offers this payment plan:

Pay 20% deposit, plus 10 monthly payments of £90
Work out the percentage increase on the price of the sofa if you buy it using the payment plan.

Answer 1

1.893%

Explanation:

20% of deposit = .2 x £1099 = £219.8

10 mostly installment of £90 = £900

Installment plan cost = £1119.8

Percent increase = (Payment plan / Original cost) - 1 = (£1119.8/£1099) -1 = .01893

or 1.893%