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Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him two payment options: Pay $25,500 today
Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him two payment options:
- Pay $25,500 today for the car.
- Pay $2,100 at the end of each quarter for three years.
Required:
1-a. Assuming Denzel uses a discount rate of 8% (or 2% quarterly), calculate the present value.
1-b. Which option gives him the lower cost?
Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him two payment options:
- Pay $25,500 today for the car.
- Pay $2,100 at the end of each quarter for three years.
Required:
1-a. Assuming Denzel uses a discount rate of 8% (or 2% quarterly), calculate the present value.
1-b. Which option gives him the lower cost?
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