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Question - calculate the present value of an annuity

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Question - Calculate the present value of an annuity

Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him two payment options:

Pay $30,500 for the car today.

Pay $3,100 at the end of each quarter for three years.

Required -

1. Assuming Denzel uses a discount rate of 8% (or 2% quarterly), calculate the present value.

2. Which option gives him the lower cost?

Reference no: EM132557099

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