Rossi Excavating Inc. is purchasing a bulldozer. The equipment has a price of €100,000. The manufacturer has offered a payment plan that would allow Rossi to make 10 equal annual payments of €15,582, with the first payment due 1 year after the purchase
Instructions
a. How much total interest will Rossi pay on this payment plan?
b. Rossi could borrow €100,000 from its bank to finance the purchase at an annual rate of 8%. Should Rossi borrow from the bank or use the manufacturer's payment plan to pay for the equipment?