Question

Which of the following options is a better purchase for a bicycle? Option 1: A cash sale for $88 Option 2: $5 down with equal payments of $8 for 10 weeks Option 3: $12 down with equal payments of $5 for 12 months Option 4: $20 down with equal payments of $20 for 12 months

Answer 1

Option 3 is the best way to purchase this bicycle. The product costs $88 for cash and carry. If I pay $5 each month for 12 months, that's $60. Then, there's the deposit of $12. So, my total expense for Option 3 is $72. Thus, I can save $16 relative to Option 1 and have a nice payment plan. I also save money relative to Options 2 and 4.

Answer 2

Let's evaluate each one of our options to check which one is the better for your wallet.

Option 1: A cash sale for $88

Nothing much to do here, the cost of the bicycle is $88

Option 2: $5 down with equal payments of $8 for 10 weeks

Here you are making an initial payment of $5 and 10 payments of 8$, so let's find the total cost of the bicycle:

Total cost = $5 + 10($8)

Total cost = $5 + $80

Total cost = $85

Option 3: $12 down with equal payments of $5 for 12 months

Here you are making an initial payment of $12 and 12 payments of 5$, so let's find the total cost of the bicycle:

Total cost = $12 + 12($5)

Total cost = $12 + $60

Total cost = $72

Option 4: $20 down with equal payments of $20 for 12 months

Here you are making an initial payment of $20 and 12 payments of 20$, so let's find the total cost of the bicycle:

Total cost = $20 + 12($20)

Total cost = $20 + $240

Total cost = $260

We can conclude that the better option for purchase a bicycle is option 3: $12 down with equal payments of $5 for 12 months.