A radio worth sh 55,000 has an option of being sold under hire purchase where a deposit of shs 10,000 required while the installmente is sh 5,000 which last for a year
a) Determine price difference,

Sh.15,000

Explanation:

The price difference is the difference in value between the cash price and the hire purchase price.

The cash price =Sh 55,000

Hire purchase price = Deposit + installments

=Sh 10,000 + ( Sh 5000 x 12)

=Sh 10,000 + sh, 60,000

=Sh 70,000

The price difference = Sh.70,000 - Sh. 55,000

=Sh.15,000

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.