Exercise C-8 Calculate the present value of an annuity (LOC-3)

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

1. Pay $30,500 for the car today.
2. Pay $3,100 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. (FV of $1,PV of $1,FVA of $1, andPVA 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?

Option 1