As a New Year's gift to yourself, you buy your roommate's 1976 Ford Pinto. She has given
Question:
a. Calculate the present value of each plan's payments if interest rates are 10%. Should you choose Plan A or Plan B?
b. Recalculate the present value of each plan's payments using a 20% interest rate. Should you choose Plan A or Plan B?
c. Explain why your answers to (a) and (b) differ.
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Related Book For
Microeconomics
ISBN: 9781464146978
1st Edition
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
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