5.2) Leila purchases a bedroom suite for \( R 25000 \). In order to pay for it, she takes out a hire purchase loan. The interest on the loan is \( 14 \% \) per annum for a period of 3 years and she pays a cash deposit of \( R 5000 \). 5.2.1) How much will Leila pay over the 3 years excluding the cash deposit? 5.2.2) If Leila repays the loan by equal monthly payments, how much will she pay each month?
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To determine how much Leila will pay over the 3 years, we start with the amount financed after her cash deposit. The bedroom suite costs \( R 25000 \), and after her cash deposit of \( R 5000 \), the financed amount becomes \( R 25000 - R 5000 = R 20000 \). Now, we can calculate the total interest over 3 years. The interest rate is \( 14 \% \) per annum. The total interest on the loan can be calculated using the formula: \[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \] Here: - Principal = \( R 20000 \) - Rate = \( 14\% = 0.14 \) - Time = \( 3 \) years So the interest is: \[ \text{Interest} = R 20000 \times 0.14 \times 3 = R 8400 \] Then, adding the principal amount: \[ \text{Total Payment} = \text{Principal} + \text{Interest} = R 20000 + R 8400 = R 28400 \] 5.2.1) Leila will pay a total of \( R 28400 \) over the 3 years, excluding the cash deposit. 5.2.2) To find out the monthly payments, we divide the total payment by the total number of months in 3 years: \[ \text{Total Months} = 3 \text{ years} \times 12 months/year = 36 \text{ months} \] Now we calculate the monthly payment: \[ \text{Monthly Payment} = \frac{\text{Total Payment}}{\text{Total Months}} = \frac{R 28400}{36} \approx R 788.89 \] Leila will pay approximately \( R 788.89 \) each month.