Unexpected costs come up frequently when managing your home. Imagine that one of your major appliances or heating system has broken down and it is not repairable. You have determined that you need to make a purchase. Choose one of the following items to purchase.

• Washer/dryer combination
• Washer
• Dryer
• Refrigerator
• Stove
• Dishwasher
• Air conditioner
• Furnace
• Other item approved by your teacher

Conduct a comparison shopping analysis. Use a graphic organizer of your choice to record your findings. In your analysis, include at least two different retail locations plus a Rent-to-Own store. Consider the following criteria in your comparison:

• Warrantees
• Service agreements
• Efficiency of products
• Total costs (including delivery/installation fees, sales taxes, and cost of credit)
• Any other criterion that might affect your decision

 

Because this has come up unexpectedly and you haven't saved up the money for it, you have decided to use credit.

Using the Practical Money Skills loan calculator or another similar tool, calculate the cost of paying for your purchase using:

• MasterCard/Visa
• Store Credit Card
• Personal Line of Credit
• Rent-to-Own

For the MasterCard/Visa, Store Card and Line of Credit, use the following information:

Actual purchase price including 13% taxes: (Calculate this price)

Annual Percentage Rates:

• MasterCard/Visa: 18%
• Store Card: 28%
• Line of Credit: 6%

Compounding frequency of interest rate: 12

Minimum monthly payment: 4% of purchase price ($40 per $1000 cost) - calculate and enter

Payment as Fraction of Purchase Price: 4%

For Rent-to-Own:

Number of months: 24

Monthly Payment: 8% of purchase price ($80 per $1000 cost) - calculate and enter

Payment Fraction: 8%

Once you have completed your research, present your findings in a graphic organizer.

State from which retail location you will make your purchase and what credit method you will use to make your purchase. Explain your choice.