Molly Needs to Decide Whether to Buy a Water Heater

question 21

Essay

Molly needs to decide whether to buy a water heater for $2200 cash and enter a service contract requiring a payment of $30 at the end of every 3 months for 10 years or to enter a 10 years lease requiring a payment of $90 at the beginning of every 3 months. If the leased water heater can be bought after 10 years for $80, should Molly buy or lease the water heater, if money is compounded quarterly at 2.5%?

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Definitions:

Male Counterparts

Refers to men in roles, positions, or situations corresponding to those of women or others for comparison purposes.

Underutilized

Not used to its fullest potential or capacity.

Human Resource

The personnel of an organization or business seen as a significant asset in terms of skills and abilities.

Disabilities

Physical or mental conditions that limit a person's movements, senses, or activities, often requiring accommodations to participate fully in society.