Question 3 (ou've been considering purchasing a large-screen television for your hom electronics retailer you've identified the one that you think is right for you. choice of payment methods that are available to you: Method 1 The advertised price is $6,000 but there is a “Zero Percent Fi has advertised, requiring you to pay a 10% deposit followed
Question 3 (ou've been considering purchasing a large-screen television for your hom electronics retailer you've identified the one that you think is right for you. choice of payment methods that are available to you: Method 1 The advertised price is $6,000 but there is a “Zero Percent Fi has advertised, requiring you to pay a 10% deposit followed
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Question 3
You've been considering purchasing a large-screen television for your home. During visits to your local
electronics retailer you've identified the one that you think is right for you. You are now thinking about a
choice of payment methods that are available to you:
Method 1
The advertised price is $6,000 but there is a "Zero Percent Finance" offer that the shop
has advertised, requiring you to pay a 10% deposit followed by 18 monthly payments each
of $300.
Method 2
Although the advertised price of the TV is $6,000, the shop assistant has indicated he
might be willing to "do a deal" for only $5,400 if you can pay cash.
Your bank has agreed to let you “top up" your mortgage to purchase this TV and is currently offering a
loan with a fixed rate of 5% p.a. The loan is repayable in 18 equal monthly instalments.
Explain and demonstrate numerically which of the two alternative methods is most advantageous for
you to use.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8f734b51-2f19-4fce-8cdc-2378ba782fbb%2F63d66630-6378-4063-916a-948aaf436e75%2Facxd87q_processed.png&w=3840&q=75)
Transcribed Image Text:Question 3
You've been considering purchasing a large-screen television for your home. During visits to your local
electronics retailer you've identified the one that you think is right for you. You are now thinking about a
choice of payment methods that are available to you:
Method 1
The advertised price is $6,000 but there is a "Zero Percent Finance" offer that the shop
has advertised, requiring you to pay a 10% deposit followed by 18 monthly payments each
of $300.
Method 2
Although the advertised price of the TV is $6,000, the shop assistant has indicated he
might be willing to "do a deal" for only $5,400 if you can pay cash.
Your bank has agreed to let you “top up" your mortgage to purchase this TV and is currently offering a
loan with a fixed rate of 5% p.a. The loan is repayable in 18 equal monthly instalments.
Explain and demonstrate numerically which of the two alternative methods is most advantageous for
you to use.
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