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solution

Calculating and comparing APRs of competing financing alternatives. Lina Martinez wants to buy a new high-end audio system for her car. The system is being sold by two dealers in town, both of whom sell the equipment for the same price of 2,000. Lina can buy the equipment from Dealer A, with no money down, by making payments of 119.20 a month for 18 months; she can buy the same equipment from Dealer B by making 36 monthly payments of 69.34 (again, with no money down). Lina is considering purchasing the system from Dealer B because of the lower payment. Find the APR for each alternative. What do you recommend?

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