You are offered two options to finance a compressor with a nominal interest rate at 7.25% compounded monthly.

(a) You pay $590 per month for 134 months.

(b)You pay $545 per month for 151 months.

Compare these with the alternative of $590 per month for 151 months...

17.14 You are offered two options to finance a compressor with a nom- inal interest rate at 7.25% compounded monthly. (a) You pay $590 per month for 134 months. (b) You pay $545 per month for 151 months. Compare these with the alternative of $590 per month for 151 months Compared to the alternative, it is claimed that (a) saves $10,030 and (Hint: Use present value analysis.) (at a nominal interest rate of 8.75% compounded monthly.) (b) saves $6,795. Do you agree? Justify your response