3201 Name Date Making good financial decisions is sometimes more challenging than comparing prices. Perhaps the $80 coffee maker seems unnecessary, but if you consider that you spend $3 a day on Starbucks, then this machine will quickly pay for itself. When things get more expensive and loans are required. then these decisions become a lot more important. In this assignment, the individuals are on the verge of making a large purchase, which will require a loan. They are all asking themselves, "Should I buy?" Mary Help these six people make decisions on these important purchases. Task: Must decide if a washer and dryer is worth it. Mary goes to the laundromat every week and it costs $5. She has found a combination washer/dryer that she could purchase for $1,200, but she would need to take out a loan. The local bank is offering her an 8% loan for the full amount. Would it be cheaper to borrow money on loan or continue going to the laundromat for the next five years? Assume the washer and dryer will be financed for the five years using simple interest. Which would cost more after 5 years: the loan or paying for weekly laundry? Should she buy it? Arnold ask: Must decide if he will buy a new car. Arnold has paid off his car, but it is beginning to run into problems. He will consider buying a new car if the monthly payment is less than $200. He is looking at a $14,000 car with an interest rate of 5% simple interest for 3 years. Should he buy it? Hint: An estimated monthly payment can be found with the formula Principal + Total Interest Number of Months