They decide to shop for the new house. They choose items that amount to $1,600.00....
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They decide to shop for the new house. They choose items that amount to $1,600.00. The store has 2 options for purchasing:
- financing at 6.4% simple interest per year for 2 years with a 20% down payment.
- no down payment and financing at 6.5% simple interest for 3 years.
Answer each of the following questions separately, showing all your work to reach each answer.
- Which option should they choose if they want the smallest finance charge? Show all steps to support your answer.
- Which option should they choose if they want the smallest total installment price? Show all steps to support your answer
- Which option should they choose if they want the smallest amount of the monthly payment? Show all steps to support your answer
- If they decide to defer any purchases and take a $1,600 bonus that Maria will be getting from work and invest it at 2.5% per year simple interest, how long will it need to be invested to earn $250 interest?
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