question archive Ahmad bought a computer and printer at Computer land
Subject:FinancePrice:2.86 Bought22
Ahmad bought a computer and printer at Computer land. The printer had a $600 list price with a $100 trade discount and 3/10, n/30 terms. The computer had a $1,600 list price with a 30% trade discount but no cash discount. On the computer, Computerland offered Ahmad the choice of (1) paying $50 per month for 17 months with the 18th payment paying the remainder of the balance or (2) paying 9% interest for 18 months in equal payments.
a. Assume Ahmad could borrow the money for the printer at 9% to take advantage of the cash discount. How much would Janet save? (Assume 360 days.)
b. On the computer, what is the difference in the final payment between choices 1 and
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