Janet Foster bought a computer and printer at Computerland. The printer had a $600 list price with a $100 trade discount and 2/10, n/30 terms. The computer had a $1,600 list price with a 25% trade discount but no cash discount. On the computer, Computerland offered Janet the choice of (1) paying $50 per month for 17 months with the 18th payment paying the remainder of the balance or (2) paying 8% interest for 18 months in equal payments. a. Assume Janet could borrow the money for the printer at 8% to take advantage of the cash discount. How much would Janet save? (Use 360 days a year. Round your answer to the nearest cent.) Janet's savings b. On the computer, what is the difference in the final payment between choices 1 and 2? (Round your answer to the nearest cent.) Difference final payment

Janet Foster bought a computer and printer at Computerland. The printer had a $600 list price with a $100 trade discount and 2/10, n/30 terms. The computer had a $1,600 list price with a 25% trade discount but no cash discount. On the computer, Computerland offered Janet the choice of (1) paying $50 per month for 17 months with the 18th payment paying the remainder of the balance or (2) paying 8% interest for 18 months in equal payments. a. Assume Janet could borrow the money for the printer at 8% to take advantage of the cash discount. How much would Janet save? (Use 360 days a year. Round your answer to the nearest cent.) Janet's savings b. On the computer, what is the difference in the final payment between choices 1 and 2? (Round your answer to the nearest cent.) Difference final payment

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Janet Foster bought a computer and printer at Computerland. The printer had a $600 list price with a $100 trade discount and 2/10,
n/30 terms. The computer had a $1,600 list price with a 25% trade discount but no cash discount. On the computer, Computerland
offered Janet the choice of (1) paying $50 per month for 17 months with the 18th payment paying the remainder of the balance or (2)
paying 8% interest for 18 months in equal payments.
a. Assume Janet could borrow the money for the printer at 8% to take advantage of the cash discount. How much would Janet save?
(Use 360 days a year. Round your answer to the nearest cent.)
Janet's savings
b. On the computer, what is the difference in the final payment between choices 1 and 2? (Round your answer to the nearest cent.)
Difference final payment
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