Rajiv wants to convert his loft into a home office so that he can take advantage of the new hybrid-working approach offered by his employer. The total cost of the conversion and furniture is 3,800. However, he doesnt actually have the money to pay the full amount upfront, so is looking at two different financing options.

Option A is the credit deal offered by the retailer. Rajiv can pay in monthly instalments of 100, spreading the cost over 48 months.

Option B is to buy it partly on his credit card, which has an APR of 21.8%. Rajiv has no outstanding credit on his card and can borrow up to 1,800. He plans to use the credit limit. Even then, he will need to find 2,000 from elsewhere, which he can just about scrape together, but it will wipe out his savings. He would then aim to pay off the credit card by paying 40 per month.

3.1 Briefly explain what APR is and how it can be used. (3 marks).

3.2 Fill in Table 3 using the borrowing and saving calculator to calculate the missing figures and show your workings. (6 marks)

Table 3 Total interest options

	Monthly payment ()	Repayment period (months)	Total interest ()	APR
Option A	100	48
Option B	40			21.8

3.3 Describe two advantages and one disadvantage of Option A over Option B. (6 marks)

Note: I am reposting this question because I received my answer and the answer was wrong the experts who worked on the answer he/she couldn't even do a simple mathematical equation right ! So please I need full explanation on all this questions and be careful with the numbers....