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A?store offers?two payment plans. Under the installment plan, you pay 12.5% down and 12.5% of the purchase price in each of the next 7 years. If you pay the entire bill immediately, you can take a 15% discount from the purchase price.
a)?Calculate the present value of the payments, if you can borrow or lend funds at a 4% interest rate. Assume the?product?sells for $100.
I came up with 100/1+(.04/7) = 99.43
b)?Calculate the?payment net of discount.
I came up with $86.46
What is wrong with my calculation?
Paper#9255944 | Written in 27-Jul-2016Price : $22