Tom is in dire need of a new washing machine. he knows what model he would like to get, but doesn't have the cash to pay for it. he plans to get a line of credit (credit card) at the store when he purchases his new washer. he found four different stores that carry the same washing machine for different prices. the lines of credit they offer also come with different aprs. tom's primary goal is to minimize his monthly payment as he pays the washing machine off over the next 18 months. from which of the four stores should tom purchase his washing machine? store price ($) credit card apr bob's nuts and bolts $450.00 21% steve's scratch and dent $405.00 22% wally's washing machines $432.00 19% al's appliances $475.00 16% a. bob's nuts and bolts b. steve's scratch and dent c. wally's washing machines d. al's appliances

Solution:

1.  Store Name = Bob's Nuts and Bolts

Credit card APR = 21 % for 18 months = % Monthly

Price of Washing Machine = $ 450

Price paid by Tom to Bob's nuts and bolt's Store monthly

= 450

=

= $ 5.25

Amount paid per month =  

2.   Store Name = Steve's Scratch and Dent

Credit card APR = 22% for 18 months = % Monthly

Price of Washing Machine = $ 405

Price paid by Tom to Steve's Scratch and Dent Store monthly

= 405

=

= $ 4.95

Amount paid per month =   $

3.  Store Name =  Wally's Washing Machines

Credit card APR = 19% for 18 months = % Monthly

Price of Washing Machine = $ 432

Price paid by Tom to  Wally's Washing Machines Store monthly=

           $

Amount paid per month =  $

4.   Store Name = Al's Appliances  

Credit card APR = 16 % for 18 months = % Monthly

Price of Washing Machine = $ 475

Price paid by Tom to Al's Appliances  Store monthly

= 475

=

= $ 4.223(approx)

Amount paid per month =  $

Lowest amount per monthly for 18 months  is charged by,Steve's Scratch and Dent which is lowest among all the four stores . So Tom will buy washing machine from Steve's Scratch and Dent.