# Thread: Cash over installments question .

1. ## Cash over installments question .

There is a question in my book which is:
Mr.Brown can pay for an article in either of the two ways. He can pay the list price with a down payment of 20% and the balance in 5 installments of $16 each or he can pay the cash price of$88.How much does he save by paying the cash price ?
The book says the answer is $12.00 but according to me its$9.60. Here is how i did it

20% of 88 is $17.6 The installments will cost him :16x5=80 So He has to pay a total of 17.6+80=97.6 The difference would then be 97.6-88=9.6Ans Is my answer correct and that's a typo in the book or am i doing something wrong here ?? 2. ## Re: Cash over installments question . Originally Posted by MikeNoob Here is how i did it 20% of 88 is$17.6
That should be 20% of 100, leaving 80 (5 * 16 = 80)

If he chooses to pay cash, the 100 is reduced to 88.

12 is CORRECT.

3. ## Re: Cash over installments question .

Could you please clarify that a bit more. Why should it be 20% of 100 and not 20% of 88 (since the actual price of the item is \$88)?

4. ## Re: Cash over installments question .

I am just confused why we should take 20% of 100 and not of 88

5. ## Re: Cash over installments question .

5*16 =80, this represents 80% of the total value since he already paid 20% of it, so 100% of the total is 100,
therefore we take 20% of 100 not 88.

6. ## Re: Cash over installments question .

Thanks for clearing that up guys!!!