Hire Purchase-Price Comparison

The purpose of the sba project: The goal of this school based assessment
project is to analyze and understand the hire purchase agreements on
different common household appliances. Through hire purchase this project
will analyze total expenses and compare total prices with up front prices.

The project title: Analyzing the costs of hire purchase agreements on

common household appliances.
Introduction:
We have chosen to analyze the pricing of household appliances under two payment methods:
cash and credit. This project will explore the differences between these methods, focusing on
the increased costs associated with credit purchases due to added interest or financing fees.
Method of data collection:
The information needed for this Math SBA will be gathered through the use of prices. Using
these prices, we are going to compare the difference between paying a full cash payment and
paying on a hire purchase payment plan. This data will be collected from SP Store with the
chosen products of an oven, a tv, a fridge and a stove. The immediate payment plan and hire
purchase plan of these items are going to be recorded and used throughout this project to show
the benefits and losses of either of the plans chosen.

Presentation of data:

SBA Presentation of Data

Items Monthly Monthly Cash Price Savings

Installments Installments
total

Fridge $71.88(12 $862.56 $750 $112.56

months)

Microwave $38(12 months) $456 $400 $56

Lasko Fan $9.53(12 months) $114.36 $100 $14.36

Television $57(12 months) $684 $595 $89

1. Monthly Instalments Total (Fridge): $71.88 x 12=$862.56

Savings= Cash price - Monthly Instalments total

=>$862.56-$750=$112.56

2. Monthly Instalments Total (Microwave): $38 x 12=$456

Savings= Cash price - Monthly Instalments total

=>$456-$400=$56

3. Monthly Instalments Total (Lasko Fan): $9.53 x 12=$114.36

Savings= Cash price - Monthly Instalments total

=>$114.36-$100=$14.36

4. Monthly Instalments Total (Television): $57 x 12=$684

Savings= Cash price - Monthly Instalments total

=>$684-$595=$89

Graphs:
Analysis of data: The fridge, through a hire purchase agreement of $71.88
for 12 months, adds up to a total of $862.56. The cash price of the fridge is
$750, meaning that paying upfront will save you $112.56. The microwave
consists of $38 monthly installments for 12 months, resulting in a total of
$456. The cash price of such a microwave is $400, and by paying upfront, a
total of $56 is saved. The Lasko fan is $9.53 monthly installments for 12
months, adding up to a total of $114.36. The cash price for the fan is $100,
saving $14.36 by paying upfront. Lastly, the television is $57 monthly
installments for 12 months, adding up to a total of $684. The cash price of
the television is $595, meaning that by paying upfront, $89 is saved.

Discussion of findings: This project aimed to analyze and understand the

costs associated with hire purchase agreements for common household
appliances. By comparing the total expenses of purchasing items on a hire
purchase plan versus paying upfront in cash, we identified significant cost
differences. Below are the key findings based on the data collected from SP
Store for a fridge, microwave, Lasko fan, and television.

Fridge: The total cost of the fridge on a hire purchase plan is $862.56,
whereas the cash price is $750. This results in an additional cost of
$112.56, indicating a significant increase due to interest or financing fees.

Microwave: Purchasing the microwave on a hire purchase plan totals $456,

compared to the cash price of $400. The extra cost incurred is $56.

Lasko Fan: The hire purchase plan for the Lasko fan results in a total cost
of $114.36, while the cash price is $100. This leads to an additional cost of
$14.36.

Television: The total cost for the television on a hire purchase plan is $684,
compared to the cash price of $595. The additional cost is $89

The conclusion: This project revealed that hire purchase agreements for
household appliances significantly increase total costs compared to cash
payments. For example, buying a fridge on hire purchase costs $112.56 more
than paying upfront, and similar increases were noted for a microwave, fan,
and television. Thus, while hire purchase offers immediate access, it comes
with higher long-term expenses, making cash payments the more
economical choice.