11. Deciding whether to pay cash or finance a purchase. Use worksheet 7.2. Alice Morgan wants to buy a home entertainment center. Complete with a big-screen TV, DVD, and sound system, the unit would cost $4,500. Alice has over $15,000 in a money market fund, so she can easily afford to pay cash for the whole thing (the fund is currently paying 5 percent interest, and Alice expects that yield to hold for the foreseeable future). To stimulate sales, the dealer is offering to finance the full cost of the unit with a 36-month, simple interest installment loan at 4 percent. Alice wants to know whether she should pay cash for the home entertainment center or buy it on time. (Note: Alice is in the 28 percent tax bracket and she itemizes deductions on her tax returns). Briefly explain.

https://www.dropbox.com/s/u6axaumplrod07j/ws_07.2%20%281%29.xlsx?dl=0

5. Calculating the APR on simple interest and discount loans. Find the finance charges om 6.5 percent, 18-month, single-payment loan when interest method. Find the finance charges on the same loan when interest is computed using the discount method. Determine the APR in each case.