Question

You are considering buying one of two brands of barbecue grills. Brand F costs $650 and will last for about fifteen years. Brand G costs $200 and will last for about five years, so you will need to buy three of them over the years to equal one Brand F grill. In either case, you plan to pay for the grill with your credit card, which has an interest rate of 13.01%, compounded monthly. You will pay off a Brand F grill in five years of monthly payments, and you will pay off a Brand G grill in three years of monthly payments.

Answer 1

Assuming that you have no other purchases on your credit card, over a fifteen-year period, which kind of grill will be cheaper, and how much cheaper will it be? (Round all dollar values to the nearest cent.)
a.
Brand G will end up costing $159.48 less than Brand F.
b.
Brand G will end up costing $50.00 less than Brand F.
c.
Brand F will end up costing $134.28 less than Brand G.
d.
Brand F will end up costing $91.08 less than Brand G.

Answer 2

Can someone please help, I don't really have a teacher and the 10 min video didn't explain how to go about doing this. If someone could explain it id appreciate it.

Answer 3

M = P * ( J / (1 - (1 + J)^ -N)).

M: monthly payment
P: principal or amount of loan
J: monthly interest; annual interest divided by 100, then divided by 12.
N: number of months of amortization, determined by length in years of loan.


Applying this to Brand F.
M = 650 * (0.01084166666 / (1 - (1 + 0.01084166666)^-(5 * 12)))
M = 14.79
And over the 5 years that is 14.79 * 5 * 12 = $887.4
Applying this to Brand G
M = 200 * (0.01084166666 / (1 - (1 + 0.01084166666)^-(3 * 12)))
M = 6.73
And over the 3 years that is 6.73 * 3 * 12 = 242.28
Doing this three times gives a total price of 726.84
So Brand G is cheaper by 161.16

Answer 4

i am just trying
this answer i got from some site
i thought it is urgent so i posted here

Answer 5

thank you, i appreciate it :)

Answer 6

welcome :)