An auto dealership, KM Motors, is offering its customers free credit on a $10,000 car. The customer pays $4000 down and then the balance at the end of 2 years. A competing dealership, T Motors, does not offer free credit but will provide $500 off of the list price. If the interest rate is 10 percent, which company is offering the better deal?© BrainMass Inc. brainmass.com March 4, 2021, 5:38 pm ad1c9bdddf
Note that the customer pays more in sum through KM Motors, but since a portion of the payment is delayed, the customer can keep the ...
This solution is comprised of a simple explanation of how to calculate the present value of an investment