You are considering the purchase of some new equipment and you have been offered by two different suppliers. Supplier A offers to sell you the equipment for 20,000 pounds, but allows you to put down 2,000 pounds and pay back 18,000 pounds over 36 months (fixed payment each month) at a rate of 8% compounded monthly. Supplier B offers to sell you the equipment for 19,500 pounds but requires a down payment of 4,000 pounds with repayment of the remaining 15,500 pounds over 36 months at 10% compounded monthly. 

Calculate the monthly discount rate that makes both offers equally attractive.

Answer rating: 100% (QA)

To make both offers equally attractive the present value of both offers sho... View the full answer