Question

A car costing $125 000 may be paid for in any of the following ways:

Scheme A: By cash full payment.
Scheme B: A deposit of 40% of the cost plus 72 monthly payments of $1500. Which scheme is better A or B?
Show necessary working to justify your answer.

Answer 1

Explanation

Plan B

40% of 125000 = 40/100 * 125000 = 0.4 * 125000 = 50000

72 * 1500 = 108000

Total 158000

Plan A

125000

Difference 33000

You want to take plan A if you can.