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Brand A of car tires with a life expectancy of 3 years can be purchased for a total cost of $160. If Brand B is
Brand A of car tires with a life expectancy of 3 years can be purchased for a total cost of $160. If Brand B is purchased, the cost will be $250 and the tires will have a life expectancy of 6 years.
a. If money is worth 6.75% compounded annually to the consumer, which brand of tires (A or B) is cheaper over time? (Assume that the tires would be replaced at the end of their life expectancy with the same brand of tire.) b. ...and by how much now?
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