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?

Read the following example. Go online or call banks to research car loans from different financial institutions. Choose three different loans. Make sure each loan has a different APR and different loan period. For instance, if Loan 1 has an APR of 6.3 percent and a loan period of six years, then perhaps Loan 2 might have an APR of 3.47 percent and a loan period of four years. Then use the PACED decision-making model to decide which of the three car loans Carmen should choose.

Example:
Carmen is in the process of buying a car. She knows she needs a car loan, but she is unsure about which financial institution she should obtain the car loan from. Should she take out a loan with a loan period of four years? Five years? Six years? She has $3,000 for the down payment, and the cost of the car after tax and license fees will be $8,500. She has a credit score of 620. Her budget will allow her to make payments as high as $150 per month. Remember, the goal is to find the most cost-effective option. Which car loan should Carmen choose?

Which car loan should Carmen choose? Be sure to use the PACED decision-making model and show your work.