Vincent and his partner are saving for the 2022 Winter Olympics in Beijing, China. A Winter Games travel package is estimated to cost $11, 500 per person, inclusive of event tickets, transportation and accommodation. The package is available in two financing options.

1. The first financing option offers a deal of 12 equal monthly repayments with zero down payment and no interest charges. What cash amount should this financing option be willing to accept with its no-interest plan? By considering the current saving interest at 2.9% per year compounded monthly. (Hint: Round the final answer to its nearest cents.)

2. The second option offers the same no interest plan but requires a 4% deposit and an account establishment fee of $15 both of which are payable immediately. The second option also charges an account service fee of $4.95 per month due with each payment. What cash amount should the second financing option be willing to accept with its no-interest plan on the same package? Assume that for this option, money is worth 3.4% per year compounded monthly.

3. Which financing option is more cost-effective to Vincent and his partner? Explain briefly in 2-3 sentences.

4. With an additional $7, 600, Vincent and his partner can enjoy a three-day add-on experience for two, covering a three night mountain experience, a Great Wall Day trip and additional activities. Which financing option is preferred if Vincent and his girlfriend would like to have this add-on experience? Explain briefly in 2-3 sentences.

Answer rating: 100% (QA)

Answer 1 The first financing option should be willing to accept 11 13910 with its nointerest plan 2 The second option should be willing to accept 10 8... View the full answer