E$9-17($Algo$)$ Computing a Present Value Involving an Annuity and a Single Payment LO $9-7$

You have decided to buy a used car. The dealer has offered you two options: $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ and PVA of $$1)$

Note: Use the appropriate factor$($s$)$ from the tables provided.E$9-17($Algo$)$ Computing a Present Value Involving an Annuity and a Single Payment LO $9-7$

You have decided to buy a used car. The dealer has offered you two options: $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ and PVA of $$1)$

Note: Use the appropriate factor$($s$)$ from the tables provided.

a$.$ Pay $$680$ per month for $20$ months and an additional $$12,000$ at the end of $20$ months. The dealer is charging an annual interest

rate of $24$ percent.

b$.$ Make a one$-$time payment of $$17,845,$ due when you purchase the car.

Required:

$1-$a$.$ Determine how much cash the dealer would charge in option $($a$).$

Note: Round your intermediate calculations and final answer to $2$ decimal places.

$1-$b$.$ In present value terms, which offer is a better deal?