URGENT: DUE IN 2 HOURS

3. Time value of money: 10 marks Your dear old Grandma has been considering purchasing a large-screen television for her home. During a visit to her local electronics retailers she found the one that she thinks is right for her. She is now thinking about a choice of payment methods that are available to her: Method 1 The advertised price is $6,000 but there is a "Zero Percent Finance" offer that the shop has advertised, requiring her to pay a 10% deposit followed by 18 monthly payments each of $300. Method 2 Although the advertised price of the TV is $6,000, the shop assistant has indicated he might be willing to "do a deal" for only $5,400 if she can pay cash. Your Grandma's bank has agreed to lend her enough ($5,400) to purchase this TV and is offering her an 18-month loan with a fixed rate of 6% per annum. The loan is repayable in 18 equal monthly instalments. Your Grandma isn't sure what to do. She has never been to university and understands very little about finance. She has asked you for your advice: Required: (a) Calculate the monthly payments that would be required for the bank loan. Round your answer to two decimal places. (5 marks) (b) Demonstrate numerically which of the two alternative methods is most advantageous for your Grandma to use and explain it to her in language that she would clearly understand. Show all the calculation and use 6% per annum as the discount rate in your calculation. Round your answer to two decimal places. (5 marks, max 80 words for the explanation part)