timmymnick
contestada

Read the following scenario. Research options for payment, and use the PACED decision-making model to decide how Emmitt should pay for the television. Remember, the PACED steps are to define the problem, list the alternatives, select criteria, evaluate the alternatives, and make a decision.

Example:
Emmitt wants to buy a new flat screen television. The cost of the television is $539. He has a credit card with a credit limit of $1,000 and an APR of 22 percent. The store offers him store credit with six months no interest and an APR of 22 percent. This means if he pays the balance in the first six months, he doesn’t pay any interest. If he doesn’t pay off the balance in the first six months, then he starts paying 22 percent interest on the balance thats left. Since he just paid off his car loan, he can afford to pay $100 each month. This means it would be possible for him to pay the balance within six months. He also has a great credit score and could obtain a personal loan. Remember, the goal is to find the most cost-effective option for purchasing the TV. How should Emmitt pay for the television?

Respuesta :

livelaughlovekiara

Answer:

Emmitt should use the store credit.

Explanation:

If Emmitt would use his credit card and paid the TV off in 6 months he would pay $59.29 in interest and would pay $598.29 total.

$539*(0.22/12)

= $9.88/ month in interest

$9.88*6

= $59.29 total for 6 months

$539+$59.29

= $598.29 total

If Emmitt would use his credit card and paid the TV off in 12 months (1 yr) he would pay $118.58 in interest and would pay $657.58 total.

$539*0.22

= $118.58 total interest in 1 year

$539+$118.58

= $657.58 total

If Emmitt uses store credit and paid the TV off in 6 months he wouldn't pay interest and would pay $539 total.

There would be little to no benefit for Emmitt to get a personal loan.

Baraq

Considering the above situation, Emmitt should pay for the television using store credit.

This is because should Emmitt use his credit card and pay the television off in 6 months, he would be paying $59.29 in interest and total pay of $598.29.

Here is the calculation for illustration:

The cost of television: $539

Interest rate: 22 percent per year

=> $539 × (0.22 ÷ 12)

$539 × (0.22 ÷ 12)=> $9.88 per month in interest

=> $9.88 × 6

=> $9.88 × 6=> $59.29 total for 6 months

6 months=> $539 + $59.29

6 months=> $539 + $59.29=> $598.29 total

On the other hand, should Emmitt use his credit card and pay the television off in 12 months (1 yr), he would pay an additional $118.58 in interest, therefore making a total of $657.58

Here is the illustration:

=> $539 × 0.22

=> $118.58 total interest in 1 year

=> $539 + $118.58

= $657.58 total

However, should Emmitt use the store credit and pay the television off in 6 months, he would only pay $539, with no interest.

Hence, in this case, it is concluded that Emmitt should pay for the television using the store credit, as he would gain no benefits from the personal loan.

Learn more about the PACED decision-making model here: https://brainly.com/question/13870031

Otras preguntas