Cash price is K4200,initial deposit is K700, interest is 10% in a hire purchase. Calculate the interest charged?

To calculate the interest charged on the hire purchase, we first need to calculate the total amount paid by the buyer over the installment period.

Total amount paid = initial deposit + cash price
Total amount paid = K700 + K4200
Total amount paid = K4900

Next, we need to calculate the interest charged on the hire purchase. The interest charged is the difference between the total amount paid and the cash price.

Interest charged = total amount paid - cash price
Interest charged = K4900 - K4200
Interest charged = K700

Therefore, the interest charged on the hire purchase is K700.

Step 1: Calculate the amount financed

Amount financed = Cash price - Initial deposit
Amount financed = K4200 - K700
Amount financed = K3500

Step 2: Calculate the total interest

Total interest = Amount financed x Interest rate x Term
Term is not provided in the question, so we will assume it is 12 months for simplicity.
Total interest = K3500 x 0.10 x 12
Total interest = K420

Therefore, the interest charged is K420.