A store offers two payment plans. Under the installment plan, you pay 25% down and 25% of the purchase price in each of the next years. If you pay the entire bill immediately, you can get a discount of 12% on the purchase price. Assume the product sells for $100. a-1. Calculate the present value of the payments if you can borrow or lend funds at an interest rate of 9 percent. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a-2 Which is a better deal? b-1. Calculate the present value if the payments on the 4-year installment plan do not start for a full year. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b-2. Which is a better deal? a-1. PV of installment plan a-2. Which is a better deal? b-1. PV of installment plan b-2. Which is a better deal?
A store offers two payment plans. Under the installment plan, you pay 25% down and 25% of the purchase price in each of the next years. If you pay the entire bill immediately, you can get a discount of 12% on the purchase price. Assume the product sells for $100. a-1. Calculate the present value of the payments if you can borrow or lend funds at an interest rate of 9 percent. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a-2 Which is a better deal? b-1. Calculate the present value if the payments on the 4-year installment plan do not start for a full year. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b-2. Which is a better deal? a-1. PV of installment plan a-2. Which is a better deal? b-1. PV of installment plan b-2. Which is a better deal?
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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The municipality of Duncan has financed a sewage treatment plant by issuing $18 million worth of sinking fund debentures. The debentures have a 15-year term and pay a coupon rate of 9% compounded semiannually. What equal payments at the end of every six months will be necessary
Transcribed Image Text:A store offers two payment plans. Under the installment plan, you pay 25% down and 25% of the purchase price in each of the next 3
years. If you pay the entire bill immediately, you can get a discount of 12% on the purchase price. Assume the product sells for $100.
a-1. Calculate the present value of the payments if you can borrow or lend funds at an interest rate of 9 percent.
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
a-2 Which is a better deal?
b-1. Calculate the present value if the payments on the 4-year installment plan do not start for a full year.
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
b-2. Which is a better deal?
a-1. PV of installment plan
a-2. Which is a better deal?
b-1. PV of installment plan
b-2. Which is a better deal?
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