You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $3,800 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $2,405 now, and will need an upgrade at the end of two years, which you expect to be $1,740. With an 8% annual interest, compounded monthly, which is the less expensive alternative, if they provide the same level of service and will both be worthless at the end of the four years? [NOTE: In general and unless asked for otherwise, comparisons of project should be conducted in present worth dollars]

Which Brand is preferred?

How much will you save by purchasing your preferred brand over the other?