Sunland Tooling Ltd. is assessing two available options for the purchase of new equipment with a negotiated cash price of $130,000. The manufacturer is willing to accept a down payment of 20% of the purchase price and an instalment note for the balance. The note would require quarterly fixed principal payments (plus interest) starting October 1, 2020, for a period of two years. Sunland has a proposal from its bank for an instalment loan for two years that requires a fixed blended monthly payment (including both principal and interest) starting August 1, 2020. The loan would be for 80% of the equipments purchase price. The current market rate of interest is 6%. Both contracts have an interest rate of 6%.

a.) Calculate the amount of the payments required of Sunland under each alternative. (Round answers to 2 decimal places) Quarterly fixed principal + interest payments option with manufacturer: Total Amount of payments: $__________

b.) Fixed blended monthly instalment note with the bank including principal and interest: (Round answers to 2 decimal places)

Total Amount of payments: $__________