You need 200 000 to buy the car of my dreams what will be, Operation Management

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You need 200 000 to buy the car of my dreams what will be

You need $200 000 to buy the car of my dreams. You have been offered a hire purchase agreement at 12,5% p.a. to be repaid in 48 equal monthly instalments. (a) What will be the amount of the monthly repayments? (b) Show that a bank loan at 21% p.a. compounded monthly on the reducing balance is a better option. (c) What hire purchase rate would be better than the 21% bank loan?

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