Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him two payment options:

1. Pay $33,000 for the car today.
2. Pay $3,600 at the end of each quarter for three years.

Required: 1-a. Assuming Denzel uses a discount rate of 12% (or 3% quarterly), calculate the present value. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.)

1-b. Which option gives him the lower cost?

multiple choice

• Option 1

• Option 2