Sam Hinds, a local dentist, is going to remodel the dental reception area and add two new workstations. He has contacted A-Dec, and the new equipment and cabinetry will cost

$15,000.

The purchase will be financed with an interest rate of

8%

loan over

10

years. What will Sam have to pay for this equipment if the loan calls for

quarterly

payments

(4

per year) and

monthly

payments

(12

per year)? Compare the annual cash outflows of the two payments. Why does the

monthly

payment plan have less total cash outflow each year?