Mary O. Andrettey wants to purchase an expensive sports car. She needs to borrow money to purchase

Fantastic news! We've Found the answer you've been seeking!

Question:

Mary O. Andrettey wants to purchase an expensive sports car. She needs to borrow money to purchase the car, and has loan proposals from three different sources. The cash flows for each proposal are:

Proposal A: Payments of $2,000 per month for each of the next sixty months. The first payment is due one month from now.

Proposal B: $10,000 payable now, plus payments of $2,200 per month for each of the next 48 months. The first $2,200 payment is due one month from now.

Proposal C: Payments of $500 per month for each of the next 36 months. Plus an additional payment of $116,000 which is due 60 months from now.

The market interest rate is 0.5% per month. Which proposal is best? Support your answer with calculations.