Asked by Andrew Freed on May 30, 2024
Verified
Osgood Appliance Centre is advertising refrigerators for six monthly payments of $199, including a payment on the date of purchase. What cash price should Osgood accept if it would otherwise sell the conditional sale agreement to a finance company to yield 18% compounded monthly?
Compounded Monthly
The method of calculating interest where the interest earned is added to the principal at the end of each month, leading to interest on interest in subsequent months.
Conditional Sale Agreement
A contract in which the sale is contingent upon certain conditions, typically used in real estate and high-value purchases.
Cash Price
The amount of money required to purchase an item or service outright without financing.
- Determine the cost and benefits of purchasing goods and services on credit.
Verified Answer
EB
Learning Objectives
- Determine the cost and benefits of purchasing goods and services on credit.