Respuesta :
Answer:
Since the cost of buying on credit card is less
hence, buying from credit card is best option.
Step-by-step explanation:
Given;
Terms of lease as:
$250 down
monthly payment = $100 for 12 months
cost of purchase at the end of lease period = $300
Thus,
the total cost of buying on lease terms = $250 + ( 12 × $100 ) + $300
or
the total cost of buying on lease terms = $1750
Now,
For second alternative
Monthly payment = $130.00
Duration = 12 months
Rate of interest = 18%
monthly rate of interest, r = [tex]\frac{\textup{18}}{\textup{12}}[/tex] = 1.5% = 0.015
Now, using the compounding formula
Th total cost = [tex]\textup{Part payment}\times\frac{(1+r)^n-1}{(1+r)-1}\times(1+r)[/tex]
on substituting the values, we get
Th total cost = [tex]\textup{130}\times\frac{(1+0.015)^12-1}{(1+0.015)-1}\times(1+0.015)[/tex]
or
the total cost = $1720.78
Since the cost of buying on credit card is less
hence, buying from credit card is best option.
