In 2014 to purchase an iphone 5s with 16GB memory without locking in any phone plan you have two options: 1) Buy at Walmart with a discounted price of $549. 2) Buy at T-Mobile with a 2-year 0% APR finance with a monthly payment of $26. In this case, the ticketed price would show $624=$26×24. By now, you should know that 0% APR is a sham. Suppose that Jack didn't have money to pay for a phone then. He had a credit card with a 18% APR. Should Jack use his credit card to buy the phone from Walmart or from T-mobile using its 0% APR financing? Support your answer with calculations.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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In 2014 to purchase an iphone 5s with 16GB memory without locking in
any phone plan you have two options: 1) Buy at Walmart with a discounted price of
$549. 2) Buy at T-Mobile with a 2-year 0% APR finance with a monthly payment of
$26. In this case, the ticketed price would show $624=$26×24. By now, you should
know that 0% APR is a sham.
Suppose that Jack didn't have money to pay for a phone then. He had a credit card
with a 18% APR. Should Jack use his credit card to buy the phone from Walmart or
from T-mobile using its 0% APR financing? Support your answer with calculations.
Transcribed Image Text:In 2014 to purchase an iphone 5s with 16GB memory without locking in any phone plan you have two options: 1) Buy at Walmart with a discounted price of $549. 2) Buy at T-Mobile with a 2-year 0% APR finance with a monthly payment of $26. In this case, the ticketed price would show $624=$26×24. By now, you should know that 0% APR is a sham. Suppose that Jack didn't have money to pay for a phone then. He had a credit card with a 18% APR. Should Jack use his credit card to buy the phone from Walmart or from T-mobile using its 0% APR financing? Support your answer with calculations.
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