How much total interest will amos pay on this payment plan

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Reference no: EM13168775

Amos Excavating Inc. is purchasing a bulldozer. The equipment has a price of $104,000. The manufacturer has offered a payment plan that would allow Amos to make12 equal annual payments of $14,524, with the first payment due one year after the purchase.

(a) How much total interest will Amos pay on this payment plan?
Total interest $

(b) Amos could borrow $104,000from its bank to finance the purchase at an annual rate of 8%. Should Amos borrow from the bank or use the manufacturer's payment plan to pay for the equipment?

Use Manufacturer's Payment PlanBorrow from the Bank

Reference no: EM13168775

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