Incomplete question. The complete question reads;
Parker has saved $1,200 for him and his wife to go to an all-inclusive island resort. He decides to take out a $1,000 simple annual interest loan at 4.5% for 1 year and stay in a suite. Is Parker being financially responsible or financially irresponsible? What is the monetary value of his benefit or cost?
Answer:
financially irresponsible
Explanation:
Remember, we are told that Parker only saved only $1,200 for his stay in the resort and also plans to loan money that would still require paying interests.
From the table, we could observe that even if goes for the least expensive resort that costs $1,199, including the interest rate of 4.5% for a year implies that he will be paying $1,450 (4.5% * $1,000 + $1,000). Hence, we can conclude that Parker is being financially irresponsible because he will still have outstanding debts.