You can choose between the following rent payments; you are the tenant in the apartment:

a.        A lump sum cash payment of $12,500;

b.        12 monthly payments of $1,100 each, the first occurring at the end of the month

Which rental payment scheme would you choose if the interest rate was 5% APR with monthly compounding? What is the difference between the two options in today's dollars?

Select one:

a. A is better, difference =486.22

b. B is better, difference =486.22

c. B is better, difference =349.34

d. A is better, difference = $349.34

Answer rating: 100% (QA)

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