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Part $1$

Antonio would like to replace his golf clubs with a$$ custom$-$measured set. A local sporting goods megastore is advertising custom clubs for $$$$530,$ including a new bag.$$ In$-$store financing is available at $3\mathrm{.}25$percent$,$ or he can choose not to renew his $$$$400$ certificate of deposit$($CD$),$ which just matured. The advertised CD renewal rate is $3\mathrm{.}04$ percent. Antonio knows the$$ in$-$store financing costs would not affect his$$ taxes, but he knows$$ he'll pay taxes $(25$ percent federal and $5\mathrm{.}75$ percent$$ state$)$ on the CD interest earnings. Should he cash in the CD or use the$$ in$-$store financing?$$ Why?

$$Note: Round intermediate computations to at least five$(5)$ decimal places.

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Part $1$

The$$ after$-$tax CD earnings rate is

$$

$2\mathrm{.}1052\%.($Round to two decimal$$ places.$)$

Part $2$

Should he cash the CD or use the$$ in$-$store financing?$($Select the best choice$$ below.$)$

A$.$

Antonio should use the$$ in$-$store financing to purchase the golf clubs because $3\mathrm{.}25\%$ is the same as his CD earnings rate of $3\mathrm{.}04\%.$

B$.$

Antonio should use the$$ in$-$store financing to purchase the golf clubs because $3\mathrm{.}25\%$ is greater than his$$ after$-$tax CD earnings rate of $2\mathrm{.}11\%.$

C$.$

Antonio should cash in his CD to purchase the golf clubs because his$$ after$-$tax CD earnings rate of $2\mathrm{.}11\%$ is less than the$$ in$-$store financing rate of $3\mathrm{.}25\%.$