You are purchasing a new TV at an electronics store and the salesperson is trying to convince you to buy a

three-yearextended warranty. The cost of the warranty to you today will be

$282. However, if there is no claim against the warranty, you will get a store credit for $282 to spend

three years from now. Assume you won't have any problems with your TV and you plan on buying more electronics at this store in

three years (so you would be certain to use the store credit). Also assume the interest rate is 5% per year.

a. What is the value to you today of the promised store credit?

b. Given your answer to (a), what is the net cost of the extended warranty?

a. What is the value to you today of the promised store credit?

The value of the store credit today is

$ (Round to the nearest cent.)

b. Given your answer to (a), what is the net cost of the extended warranty?

The net cost of the extended warranty is

(Round to the nearest cent.)

The You are purchasing a new TV at an electronics store and the salesperson is trying to convince you to buy a three-year extended warranty. The cost of the warranty to you today will be $282. However, if there is no claim against the warranty, you will get a store credit for $282 to spend three years from now. Assume you won't have any problems with your TV and you plan on buying more electronics at his store in three years so you would be certain to use the store credit Also assume he interest rate is 5% per year. a. What is the value to you today of the promised store credit? b. Given your answer to (a), what is the net cost of the extended warranty? croics at he a. What is the value to you today of the promised store credit? The value of the store credit today is s (Round to the nearest cent.) b. Given your answer to (a), what is the net cost of the extended warranty? The net cost of the extended warranty is s (Round to the nearest cent.)