# Robson » Little Red Book » Hire Purchase Charges

## Chapter 3 - Question 11

Given the cash price of an item together with the percentage rate required, calculate the HP charges for a given repayment.

### Solution 1

I had no idea how hire purchasing works, so I had a look round the web for some information. As far as I can tell a total price is agreed upon and then the buyer pays equal amounts every month until they reach that amount. They usually pay a deposit, but the question doesn't mention that so I wont include that part of the deal.

I'm not certain that's how it works, but I can always update my answer if I discover it works differently.

`<?`
`    // a random cash price of an item in pounds`
`    \$cash_price = mt_rand(5, 20);`
`    // a random percentage rate`
`    \$percentage_rate = mt_rand(5, 50);`
`    // a random number of repayment periods`
`    \$repayments = mt_rand(2, 10);`
`    `
`    // the total amount to pay is the cash price plus the percentage`
`    \$total = \$cash_price + (\$cash_price * (\$percentage_rate / 100));`
`    `
`    // the amount to pay each month is the total amount`
`    // divided by the number of repayments`
`    \$repayment = \$total / \$repayments;`
`    `
`    // output the original values`
`    echo   . number_format(\$cash_price, 2) . '<br/>'`
`         . 'Percentage Rate: ' . \$percentage_rate . '%<br/>'`
`         . 'Repayments: ' . \$repayments;`
`         `
`    // output the total amount to be paid     `
`    echo . number_format(\$repayment, 2) . '</b>';`
`?>`

Which produces:

Cash Price: £20.00
Percentage Rate: 49%
Repayments: 3

Monthly Amount: £9.93

## Log

• Novemember 6, 2005 - Added solution 1.
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