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You have set your sights on a new iPhone X (64 GB). You have two options: 1. A 2 year plan which includes the phone

You have set your sights on a new iPhone X (64 GB). You have two options: 1. A 2 year plan which includes the phone at 58 a month 2. Buy the phone for 977 now and get a 2 year sim-only plan for 23 a month. The consumer credit rate is quoted at 3% per year (.25% per month).

a. What is the present value of the payments in option 1? b. Now calculate the present value of option 2. Which option should you take?

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