Problem $2.$ Credit or Cash. You're debating between paying cash for some

land, or borrowing the funds. While researching your options, you come across the

attached article from the L$.$A$.$ Times about a loan with the same terms you've been

offered.

$($a$)$ Verify that the numbers quoted in the article for interest paid $($$$4,779\mathrm{.}20)$ and

interest earned $($$$5,672\mathrm{.}56)$ are correct $($within rounding$).$ Why are these numbers not sufficient for

determining whether you should pay cash or take out a

loan?

$($b$)$ Evaluate the proposal that you borrow rather than pay cash using present value

calculations. Do this by calculating the present value of your land payments

if you pay cash and the present value of your land payments if you take out

a loan $($think carefully about which interest rate to use in your present value

calculations$).$