The cash price of a washing machine is $840.
If paid by hire purchase scheme, the deposit is 15% of the cash price and the subsequent 24 equal monthly payments is $33.50.
Calculate the interest rate per annum. Answer ...%

1. Calculate the deposit and amount owing after deposit

Deposit $=15\%\times \char36{}840$

$=0.15\times 840=\$126$

Amount owing after deposit:

$\$840-\$126=\$714$

2. Find the total interest paid under the hire purchase scheme

Total monthly payments:

$24\times \$33.50=\$804$

Total hire purchase price:

$\$126+\$804=\$930$

Interest paid:

$\$930-\$840=\$90$

3. Calculate the annual interest rate on the amount financed

The amount financed is $\char36{}714$ and the time is $24$ months $=2$ years.

Using simple interest,

$I=Prt$

$90=714\times r\times 2$

$r=\frac{90}{714\times 2}=0.063025\ldots$

As a percentage,

$r=6.3025\ldots\%\approx 6.3\%$