Sandy is buying a new chair for $36,425, including a shipping charge of $1300. She is considering the following two credit options: •Financing through the dealership at 4.3%, compounded monthly, for a term of four years, with the incentive that the dealership will Pay the $1300 shipping charge • A bank loan at 4%, compounded monthly, for a term of five years a) what are the monthly payments for each option? b) what is the total payment for each option? c) what are the advantages and disadvantages of each option?
Sandy is buying a new chair for $36,425, including a shipping charge of $1300. She is considering the following two credit options: •Financing through the dealership at 4.3%, compounded monthly, for a term of four years, with the incentive that the dealership will Pay the $1300 shipping charge • A bank loan at 4%, compounded monthly, for a term of five years a) what are the monthly payments for each option? b) what is the total payment for each option? c) what are the advantages and disadvantages of each option?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 25PROB
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Sandy is buying a new chair for $36,425, including a shipping charge of $1300. She is considering the following two credit options:
•Financing through the dealership at 4.3%, compounded monthly, for a term of four years, with the incentive that the dealership will Pay the $1300 shipping charge
• A bank loan at 4%, compounded monthly, for a term of five years
a) what are the monthly payments for each option?
b) what is the total payment for each option?
c) what are the advantages and disadvantages of each option?
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