Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him two payment options:
Pay $25,000 today for the car.
Pay $2,000 at the end of each quarter for three years.
Required:
1-a. Assuming Denzel uses a discount rate of 12% (or 3% quarterly), calculate the present value.
1-b. Which option gives him the lower cost?
