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The local electronics store is offering a promotion​ "1-year: same as​ cash," meaning that you can buy a TV​ now, and wait a year to pay​ (with no​ interest). So, if you take home a $ 1,450 TV​ today, you will owe them $ 1,450 in one year.
If your bank is offering 4.5 % ​interest, what is the true cost of the TV to you​ today?

Respuesta :

Answer:

The correct answer is $1,387.56.

Explanation:

According to the scenario, the given data are as follows:

Amount to be paid = $1,450

Rate of interest = 4.5%

Time = 1 year

So, we can calculate the true cost of TV today by using following formula:

Cost of TV today = [tex]\frac{payment}{1 + r^{t} }[/tex]

= [tex]\frac{1,450}{1 + 0.045}[/tex]

= [tex]\frac{1,450}{1.045}[/tex]

= $1,387.56 (approx.)

Hence, the true cost of the TV to you​ today is $1,387.56.