A Department Store Is Offering a Washer/dryer for $1480 Now

question 124

Multiple Choice

A department store is offering a washer/dryer for $1480 now or can pay $1500 in 120 days. If interest is 8.52%, determine whether a customer should purchase now or in 120 days.

• A) Buy now - Savings of $20.87
• B) Buy now - Savings of $22.38
• C) No difference between two options
• D) Buy later - savings of $20.87
• E) Buy later - savings of $22.38

---

Definitions:

Accredited Investor

An individual or entity recognized as having the financial sophistication and capacity to bear the risk of investment opportunities that demand less regulatory disclosure.

Securities

Tradable financial assets including stocks, bonds, and options, which represent an investment and a means for entities to raise capital.

Sarbanes-Oxley Act

U.S. legislation enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.

Accounting Standards

Rules and guidelines set by governing bodies that determine how financial transactions and statements are recorded and reported.