You Have a Company That Needs a New Computer System

question 41

Multiple Choice

You have a company that needs a new computer system that will cost $25,000.You put down $5,000 and finance the remainder at 12 percent,compounded monthly for 2 years.The bank will automatically deduct the payment from your account at the beginning of each month.What is your monthly equipment payment?

• A)$2,677
• B)$2,230
• C)$1,176.83
• D)$941.47

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Definitions:

Value of Money

The value of money is the purchasing power of currency, which determines the amount of goods or services that can be purchased with a unit of currency.

Dollar Prices

The price of a good or service expressed in units of the U.S. dollar.

Relative Prices

The price of one good or service compared to another, typically influencing consumer choice and resource allocation.

Nominal Variables

Variables measured in monetary terms and not adjusted for inflation, representing prices or values at the time of transaction.