Your wedding tuxedo suit costs $2,500. The Jason Wu Store offers you two payment plans: If you pay in cash (or charge your credit card) you get a 10% discount; alternatively you can use the stores finance offer, i.e., putting $0 down today and paying $250 per month in the next 10 months, and the first payment will be due one month from today. What is the EAIR if you use the stores finance offer? If your credit card charges 12% (or if you can borrow from a bank at %12), should you pay cash (or charge your credit card) or take the stores payment plan?

Buying a Tuxedo Tuxedo price $2,500 Discount for cash 10% Number of monthly payments 10 Store finance Monthly Payment 250