Joe Is Shopping for a New Computer

question 20

Multiple Choice

Joe is shopping for a new computer. A computer can be delivered to Joe's home for $1,200. Alternatively, Joe can pick up the same computer at the warehouse for $1,000. How should Joe buy the computer?

• A)Joe should drive to the warehouse because $1,000 is less than $1,200.
• B)Joe should drive to the warehouse if his cost of driving to the warehouse is less than $200.
• C)Joe should drive to the warehouse if his cost of driving to the warehouse is greater than $200.
• D)Joe should drive to the warehouse because the $200 he would save by driving to the warehouse is more than 10% of the purchase price.

---

Definitions:

Principal

The original sum of money borrowed in a loan, or the amount of the investment itself.

Interest Components

Elements that contribute to the total interest calculation, often including principal, rate, and time.

Per Annum

Annually or per year, often used to describe rates or amounts calculated over the span of a year.

Maturity Value

The total amount that will be paid to an investor at the end of a fixed-term investment, including the principal and interest.