Read the sales pitch again. What do you think about the SC$\text{'}$s reasoning? Has he calculated

the true cost of the vacation? Is he trying to mislead E$?$

$2.$ How much will the yearly maintenance fee cost E $($what is the present value$)?$ Use an interest

rate of $8\%/$yr compounded yearly $($Note: this rate is E$$s discount rate, not the rate at which the

maintenance fees will increase$).$

$3.$ What would E$\text{'}$s annual payments on the $$30,000$ loan be$?$

$4.$ Assume E could deposit a lump sum amount now in a savings account earning $8\%$ per year

compounded yearly. How much would he have to deposit now to finance his dream vacation

for the next $30$ years? In this case, E would buy hotel rooms each year, but not pay maintenance

fees $($that cost is already in the cost of the room$).$ Assume that the hotel room rate will increase

at $5\%$ as the SC stipulated. Compare this amount to the cost of the timeshare.

$5.$ Maybe E should take the loan. Is it a good idea to take out the $20\%$ loan to avoid a $5\%/$yr

increase in the cost of the vacation? Explain.

$6.$ Is the SC offering E a good deal? Should he sign up$?$