Question

Nissan Oman is announced Ramadan offer to its customers for a limited period of time. The offer is available only for citizens and residents with stable monthly income. The offer is part of the company’s sale promotion campaign in the Holy month. The following were offered to you;

Quation:-

i) Nissan Altima 2020, cash price OMR 10,000, down payment OMR 600 and the balance will be paid with 36 equal monthly payments of OMR 275. If you are interested to buy the car, how much you have to spend for this car?   

ii) Nissan Altima 2020, cash price OMR 10,000, down payment OMR 1.200 and the balance will be paid with 36 equal monthly payments of OMR 140. If you are interested to buy the car, how much you have to spend for this car?
iii) Compare the finance charges of the above two options and suggest the best one for the car buyers.

iv) Mr. Salim is a business man decided to buy the same car with ready cash, since his income was not regular. So he borrowed money from a moneylender at the simple interest rate of 4% for three years.

v) Recommend the suitable method of financing to Mr.Salim? Explain.   

Answer 1

1. In first option

Total money to be spend onn car is Down payment + Installments including interest

= 600+(36*275) = 600+9900 = 10500 OMR

2. Total money to be spend on car is Down payment + Installments including interest

= 1200+(36*140) = 1200+5040 = 6240 OMR

3. Since Car Price is 10000 OMR.

In first Option total money to be spend is 10500 OMR

So Total Interest = 10500-10000 = 500 OMR

In second Option Total money tob Spend is 6240 OMR

So inn this option car is sold on discount of (10000-6240) 3760 OMR

So Second Option is Better.

4.Question is not clear in the fourth

5. Bank loan is better for Mr Salim. Bank loan is always safe since it is legal way of borrowing. Not only that interest rate is just 4% is also attractable. And also vehicle loan is better than personal loan, because most of the banks charging flexible interest on personal loan and fixed interest on personal loan, since his income is not regular personal loan can flexible to high interest rather than fixed interest in personal loan.