You are buying a new TV set. Your estimated future repair costs will be: year 1: $15 / year 2: $25 / year 3: $35 / year 4: $45. Answer the following questions.

a) If you were to convert the uneven 4-year cash flow into an equal-payments cash flow, at an interest rate of 6%, what would be your yearly payment? (Answers are rounded)

b) If the dealer offers you a four year repair contract for $90, should you purchase the contract or just pay for repairs as needed. Consider the same 6% interest rate. Show the data/calculations you based your decision on.