Mayesha purchased a large screen TV for $4,000 and can pay it off in ten months with an add-on interest loan at an annual rate of 8%, or she can use her credit card that has an annual rate of 18%. If she uses her credit card, she will pay $400 per month (starting next month) plus the finance charges for the month. Assume that her credit card company uses the unpaid balance method to compute her finance charges and that she is making no other transactions on her credit card. Which option will have the smaller total finance charges on her loan?

1.) What are Mayesha's total finance charges using the add-on plan? (Round to the nearest cent as needed.) 2.) What are Mayesha's total finance charges if she uses her credit card? (Round to the nearest cent as needed.) 3.) Which is the best option for Mayesha? 

Answer rating: 100% (QA)

Option 1 Addon Interest Loan Mayeshas total finance charges using ... View the full answer