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Which alternative is cheaper

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Reference no: EM132966300

You are about to sign a 12 month lease agreement to rent a shop for your own business. The rent for the shop is $21,000 payable at the end of the year.

Alternatively, the owner of the shop will allow you to pay four quarterly instalments of $5,250 with the first instalment due at the end of the first quarter.

Problem 1: If the current interest rate is 6% per annum compounding quarterly, which alternative is cheaper?

Reference no: EM132966300

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