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You have decided to buy a used car. The dealer has offered you two options: a. Pay $340 per month for 8 months and an

You have decided to buy a used car.

The dealer has offered you two options:

a. Pay $340 per month for 8 months and an additional $9,500 at the end of 8 months. The dealer is charging 24 percent per annum.

b. When you buy the car, pay cash equal to the present value of the payments in option

Determine how much cash the dealer would charge in option (b).

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