Three-part Question:
Part A - Dell computer has two promotions to sell its $3,000 laptop
computers. One promotion is the low interest rate loan (the nominal
annual interest rate is 1.2% for 2 years, monthly compounding) and
the other one is the cash rebate. Two promotions should be
indifferent for the buyers. If John chose to apply for the 1.2%
amortized loan (2 years, monthly payments) to buy the computer,
what's his monthly payment?
A. $144.61
B. 126.57
C. 1527.05
D. 251.63
Part B - Based on the Dell computer promotion, if Smith chose to
pay cash at one time and get cash back. How much should he actually
pay to buy the computer? If we assume the current market rate i =
9%
A. 3,000
B. 2,578.54
C. 2,688.78
D. $2,770.50
Part C - If Company A offers a similar laptop as Dell computer
stated in Question 8, but has a different sales promotion (10%
discount for the original sales price $3,000). Which laptop do you
prefer to buy?
A. The laptop from Dell
B. The laptop from Company A
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
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