3.4. Jemifer wishes to buy a new bike on hire purchase. The price of the bike is R15 000. She pays a deposit of \( 10 \% \) of the price. She will pay the rest off at an interest rate of \( 11 \% \) p.a. over four years. What will her monthly payments be?

To find Jennifer's monthly payments for the bike on hire purchase, we need to calculate the total amount she will pay over the four years, including the interest. Given: - Price of the bike: R15,000 - Deposit: 10% of the price - Interest rate: 11% p.a. - Time period: 4 years 1. Calculate the deposit amount: \[ \text{Deposit} = 10\% \times \text{Price} = 0.10 \times 15000 = R1500 \] 2. Calculate the remaining amount to be paid: \[ \text{Remaining amount} = \text{Price} - \text{Deposit} = 15000 - 1500 = R13500 \] 3. Calculate the total interest paid over 4 years: \[ \text{Total interest} = \text{Remaining amount} \times \text{Interest rate} \times \text{Time period} \] \[ \text{Total interest} = 13500 \times 0.11 \times 4 = R5940 \] 4. Calculate the total amount to be paid: \[ \text{Total amount} = \text{Remaining amount} + \text{Total interest} = 13500 + 5940 = R19440 \] 5. Calculate the monthly payment: \[ \text{Monthly payment} = \frac{\text{Total amount}}{\text{Time period in months}} \] \[ \text{Monthly payment} = \frac{19440}{4 \times 12} = \frac{19440}{48} = R405 \] Therefore, Jennifer's monthly payments for the bike on hire purchase will be R405.