Question 349244
I'll say the purchase price is {{{p}}}
Installment plan:
25% down leaves {{{.75p}}} left to pay off in 3 years
Entire bill plan:
{{{p - .1p = .9p}}} You pay 90% of the bill immediately
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The 2nd plan puts {{{.1p}}} in your pocket immediately
With the 1st plan, you can invest {{{.75p}}} at 5% the 1st
year, which is {{{.05*.75 = .0375p}}}
The 2nd year, you have {{{.5p}}} to invest at 5%, which is
{{{.05*.5p = .025p}}}
The 3rd year, you have {{{.25p}}} to invest at 5%, which is
{{{.05*.25p = .0125p}}}
Adding these for the 3 years, I get {{{.0375p + .025p + .0125p = .075p}}}
This looks like the 2nd plan wins, since
{{{.1p}}} is greater than {{{.075p}}}