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A car is purchased on hire-purchase. The cash price is $21 000 and the terms are a deposit of 10% of the price, then the balance to be paid off over 60 equal monthly installments. Interest is charged at 12% p.a. What is the monthly installment?

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A car is purchased on hire-purchase. The cash price is $21 000 and the terms are a deposit of 10% of the price, then the balance to be paid off over 60 equal monthly installments. Interest is charged at 12% p.a. What is the monthly installment?

A. $503
B. $504
C. $505
D. $506
Cash price = $21 000
Deposit = 10% × $21 000
= $2100
Loan amount = $21 000 − $2100
= $18 900
I=p*r*t/100
I=11340
Total amount = 18 900 + 11 340
= $30 240
regular payment = total amount /number of payments