We moved into our current home in 2004 and our home came with off-white carpet in the living areas. Now you can only imagine how that works with two (2) gardeners in the house. We are constantly tracking stuff in the house from our boots/shoes! Plus, it is now starting to show wear in the traffic areas.

So, this year we plan to replace the carpet and have been watching for a deal. Recently, we got a promotional flyer from Bud Polleys in Tipp City, Ohio, for a sale on carpet including the installation. The sale included financing term for 36 months same as cash (pay off total amount due in 36 months and pay no interest - this means you use their money free).

We visited the store and got a quote for carpet and installation of $3,400, plus 7% tax. If we were to finance the full amount, plus tax, for 36 months what would that mean? So this is a practice exercise for you and here are the questions to consider, (some of them are answered for you, and you will answer the rest). Directions will follow.

What item did you select? Berber Carpet

What store did you go to? Bud Polleys Floor Center

How much does the item cost if you pay cash, and/or pay the loan off within the terms of the agreement? $3,400- Purchase Price, plus 7% tax.

What are the financing terms if it is financed on time with installment payments?

The terms are 36 months same as cash, 36 equal payments. Terms state that the interest will be charged if the monthly payment is not received by the due date.

What rate of interest do they charge? 29.99% variable

Is there any penalty for late payments?

If any payment is late, 100% of interest is applied.

Is there any penalty for paying the loan off early?

No

What is the total amount you will pay if you do not pay the loan within the term and meet all the conditions of the loan?

How much interest will you pay if you do not pay the loan within the term and meet all the conditions of the loan?

Any other information you learn or things you should consider regarding this item.

Another option to purchasing using the credit account of 36 months same as cash is to save the money in our bank account and pay cash.

Is it a good deal to purchase it on time from this store?

If I want to purchase, this current deal is a good one because it offers the opportunity to not have to pay interest on the purchase while not having to pay cash up front. 36 months to pay the money, same as cash, is a long time to use someone elses money free. Risk is in not being able to pay the payment on time because of: poor planning, or not having the funds available.