Store offers to payment plans. Under the installment plan, you pay 25% down and 25% of the purchase price in each of the next three years. If you pay the entire bill immediately, you can take a discount at 6% from the purchase price. I assume the product sells for $100.

a-1 Calculate the present value of the payments if you can borrow or land funds at an interest rate of 3%.

a-2 Which is A better deal? installment plan or pay in full

b-1 calculate the present value if the payments on the four year installment plan do not start for a full year.

b-2 Which is A better deal? installment plan or pay in full