Question:

Problem Question:

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Part B, Off-textbook exercise: Calculate the period and interest rate (opportunity cost in %) of a consumer purchase-rental plan, described as below. You want to play the saxophone and thus sign up for a purchase rental program. The deal is: The price tag amount of the saxophone is $1,865. You get a 20% discount if you instantly pay off the balance on the purchase date. If not, credit loan terms are: no price discount will be provided, zero down payment needed today, interest free during the first 6 months, and then 1.5% interest per month after. Installment loan payments are $48 per month, by the end of month. And an extra $6 per month for the account maintenance fee, by the end of month. a) How many months will it take you to pay off the whole deal