Determine range of the interest rate

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Reference no: EM132033907

Susan wishes to purchase a laptop computer. She is offered the following payment options:

Option 1 : $0 down, $432 in 1 year, $300 in 2 years

Option 2 : $82.56 down, $250 in 1 year, $400 in 2 years

Determine the range of the interest rate i for which the present value of Option 1 is less than the present value of Option 2.

A) 4.2%< i <16.3%

B) i <4.2% or i >16.3%

C) 3.5%< i <10.2%

D) i <3.5% or i >10.2%

E) i >4.2%

Reference no: EM132033907

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