In this assignment, we'll study various options for making a large purchase, including saving money in advance and paying cash, obtaining a fixed installment loan, and using a credit card. The goal is not just to perform calculations, but to think about all aspects and decide which you think is the best choice. We'll use furniture as an example, as it's pretty common to finance furniture purchases when you need to fill a new place. Let's say that the goal is to buy $3,500 worth of furniture. We'll start with a fixed-installment loan from the furniture store. They're offering 3-year financing with no money down at 11.99% annual interest. 1. Find the monthly payment. You can use the monthly payment formula and calculate by hand if you like, but remember that the TVM solver on a calculator and the PMT function in Excel are good options as well. 2. Find the total installment price and finance charge. The store also offers 18-month financing with no payments and no interest, but if the balance isn't paid in full at the end of 18 months, 17.99% interest will apply to the entire purchase amount, and will continue on any unpaid balance after 18 months. 3. Let's say you take this option and forget to pay off the final amount before the 18 months is up. And believe me, it's easy to do-they don't exactly go out of their way to remind you of the end date. If you'd paid $100 per month up until that point, how much would you still owe after the interest charge kicks in? Remember, the interest will be calculated on the ENTIRE purchase, not just what's left.