Safari 15:04 329 88- VPN @ 83% QMB Assignment 1 , ti Q Calibri 19 B 1 u A. Question 3 (Total of 22 marks) Classic Furniture advertises a "One-Year No-Interest Sale on any purchase over $499. They require a deposit of 10%, with the balance of the purchase price to be paid in 12 cqual monthly payments with no interest charged. (a) (11 marks) What is the cash price equivalent to Classic's no-interest plan on an item ticketed at $1,000? Assume an interest rate of 11.5% per year compounded monthly. Is this a good deal for a customer? Give a reason. (b) (11 marks) Flemmings Furniture offers the same no interest plan but requires an establishment fee of $25 payable immediately. Flemmings also charges an account keeping fee of $3.95 per month due with each payment. What is the cash price equivalent to Flemmings' no-interest plan on an item ticketed at $1,000? Assume the same interest rate as in part (a). Is this a good deal for a customer? Give a reason