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You plan to buy a new TV selling at $800. A store offers two payments plans, A or B: Option A: you pay 25% down
You plan to buy a new TV selling at $800. A store offers two payments plans, A or B: Option A: you pay 25% down today and 25% of the purchase price in each of the next 3 years. Option B: you pay the entire bill immediately, and take 10% off the purchase price Which is a better deal if you can borrow or lend funds at a 5% interest rate? How will your answer change if payments in option A do not start for a full year? In other words, you would pay 25% of the purchase price in each of the next 4 years
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