Two part question:
1. You are thinking about buying a new car. The salesman tells you that you can pay $3,000 today and $5,000 in two years and drive away with the car today. If you know that the company charges 26% interest on outstanding balances, what should the cash price, today, be for the car?
2. The car salesman in question 1 says that there is a aspecial on today. I you pay cash you can buy the car for $6,500. Would you accept the offer? Why?
The answer needs to show full work of how you go your results.
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