You want to purchase a big-screen TV for $2000. You can purchase the TV with your credit
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Question:
You want to purchase a big-screen TV for $2000. You can purchase the TV with your credit card that charges 14% APR (compounded monthly) and make 36 monthly payments. Alternatively, you can go to a “rent to own” store and rent the TV and pay $70 per month for 36 months at which time you would own the TV. If your savings account earns 3% APR (compounded monthly), which method of getting the TV is cheaper in present value terms and by how much? (pick the answer that is closets to the nearest dollar)
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
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