Dell Canada advertises a computer bundle including printer, router and home network attached storage for $2995. The same system bundle may be leased for 24 months at $130 per month, at the beginning of each month. At the end of the lease, the bundle may be purchased for 10% of its retail price. What is the economic cost of the lease or purchase in present value, if a two year loan can be obtained at 12% compounded annually to purchase the computer?

Select one:

A.

Purchase is better by $48.64

B.

Lease is better by $48.64

C.

Lease is better by $109.38

D.

Purchase is better by $109.38

E.

Both options are the same.

You start to save for a major purchase. You can invest $500 every three months for 10 years. You are able to earn 8% compounded semi-annually. What is the amount of interest that you earn during the entire term?

Select one:

A.

$15 072.94

B.

$30 072.94

C.

$25 072.94

D.

$20 072.94

E.

$10 072.94