Credit agreements
Finding a deposit
A credit agreement is a popular way of buying expensive goods. Using a credit agreement you usually pay a deposit first and the remainder by monthly instalments. Goods normally cost more on a credit agreement.
Example
Tom wants to buy a TV through a credit agreement. He has been asked to make a deposit of one fifth of the total price of \(\pounds200\).
How much will the deposit be?
Answer
Deposit \(= \frac{1}{5}\) of \(\pounds200\)
\(= \frac{200}{5}\)
\(= \pounds40\)
Tom needs to make a deposit of \(\pounds40\).
Now find the deposit for each of the following:
Question
How much will a deposit of \(15\%\) of \(\pounds300\) be?
Deposit \(= 15\%\) of \(\pounds300\)
\(= 15 \times 1\%\) of \(\pounds300\)
\(= 15 \times 3\)
\(= \pounds45\)
The deposit will be \(\pounds45\)
Question
How much will a deposit of \(\frac{1}{4}\) of \(\pounds300\) be?
Deposit \(= \frac{1}{4}\) of \(\pounds300\)
\(= \frac{{300}}{4}\)
\(= \pounds75\)
The deposit will be \(\pounds75\).
Question
How much will a deposit of \(20\%\) of \(\pounds500\) be?
Deposit \(= 20\%\) of \(\pounds500\)
\(= \frac{{500}}{5}\) (because \(20\%\) is the same as \(\frac{1}{5}\))
\(= \pounds100\)
The deposit will be \(\pounds100\).
