This business/management problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
ScanSolve AI Answer
Step 1: Answer question 2.2.1. The monthly instalment for the rent-to-own option is directly stated in the advertisement under "OPTION 1: RENT-TO-OWN". The monthly instalment is R1 549 p/m. Monthly instalment = R1\,549 Step 2: Answer question 2.2.2. The cash price including VAT is R78 200. In South Africa, the standard VAT rate is 15\%. To calculate the price excluding VAT, we divide the price including VAT by (1 + VAT rate). Price excluding VAT = Cash price (incl. VAT)1 + VAT rate Price excluding VAT = R78\,2001 + 0.15 Price excluding VAT = R78\,2001.15 Price excluding VAT = R68\,000 Step 3: Answer question 2.2.3 by calculating the total cost of the rent-to-own option. The rent-to-own option involves: • Monthly payments of R1 549 for 7 years. • An additional R782 initiation fee. • A buy-out amount of R7 820 after the rental period. First, calculate the total amount paid in monthly instalments: Total monthly instalments = R1\,549 × 7 years × 12 months/year Total monthly instalments = R1\,549 × 84 Total monthly instalments = R130\,116 Next, calculate the total cost of the rent-to-own option: Total rent-to-own cost = Total monthly instalments + Initiation fee + Buy-out amount Total rent-to-own cost = R130\,116 + R782 + R7\,820 Total rent-to-own cost = R138\,718 Step 4: Calculate the extra amount Mieecke has to pay compared to buying the home solar system unit for cash. The cash price (including VAT) is R78 200. Extra amount = Total rent-to-own cost - Cash price (incl. VAT) Extra amount = R138\,718 - R78\,200 Extra amount = R60\,518 That's 2 down. 3 left today — send the next one.