2026 PCSS P1 Q21

Tommy bought a car by hire purchase. The cash price of the car was $93 500.

He paid a deposit of $9350 and the rest by equal monthly instalments over a period of 7 years. The bank charges a simple interest rate of 2.8% per annum on the amount loaned.

1. Calculate the total interest charged.[2]
2. Calculate Tommy’s monthly instalment.[2]