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. 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 1

a. Brand G will end up costing $159.48 less than Brand F.

Explanation:

If you calculate the compound interest of paying the $650 barbecue to five years the cos would be around 1050 after paying the compound interests of 13.01% monthly, and when you calculate the cost of paying off a $200 over 3 years the cost of the three would be $898, so it would be cheaper to buy the three $200 barbecues over the spam of 15 years, that would be the answer.

Answer 2

a. Brand G will end up costing $159.48 less than Brand F.