Saranjit wishes to purchase a motorbike that costs $1200. She cannot afford to pay immediately. Under the terms of a credit agreement offered by the retailer, she will pay a deposit of $200 and then pay off the rest of the purchase price plus 10% interest in 12 equal instalments.
If Saranjit accepts the offer of a credit agreement, how much will she pay for the motorbike?

Q: What topic does this question test?

This question tests Credit in O-Level Commerce (syllabus code 7100). It is worth 1 mark.

Q: Which exam paper is this question from?

This question appeared in the Cambridge O-Level Commerce Oct/Nov 2013 examination, Paper 1 Variant 2 (7100_w13_qp_12.pdf).

Question

Saranjit wishes to purchase a motorbike that costs $1200. She cannot afford to pay immediately. Under the terms of a credit agreement offered by the retailer, she will pay a deposit of $200 and then pay off the rest of the purchase price plus 10% interest in 12 equal instalments.
If Saranjit accepts the offer of a credit agreement, how much will she pay for the motorbike?

Oracle Prep · Accepted Answer

The correct answer is C: $1300.

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