Exercise $5-13($Algo$)$ Present value; ordinary annuity $($LO $5-8)$

Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him two payment

options:

Pay $$26,500$ today for the car.

Pay $$2,300$ at the end of each quarter for three years.

Required:

$1-$a$.$ Assuming Denzel uses a discount rate of $8\%($or $2\%$ quarterly$),$ calculate the present value.

$1-$b$.$ Which option gives him the lower cost?

Complete this question by entering your answers in the tabs below.

Req $1$B

Assuming Denzel uses a discount rate of $8\%($or $2\%$ quarterly$),$ calculate the present

value.

Note: Use tables, Excel, or a financial calculator. Round your answers to $2$ decimal places.

$($FV of $$1,$ PV of $$1,$ FVA of $$1,$ and PVA of $$1)$

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