Jeremy Has a Number of Outstanding Credit Cards Debts

question 45

Multiple Choice

Jeremy has a number of outstanding credit cards debts. He seeks help from BDO to consolidate his debts and make it easy for him to make the debt payments. BDO offers him two alternatives. In the first alternative, the debt can be settled by making a payment of $30 000 now and a final payment of $42 000 in 3 years. Alternatively, the obligation can be settled by payments of $8400 at the end of every three months for three years. Which alternative is preferred if the interest is 8.5% compounded quarterly.

• A) Alternative 1
• B) Alternative 2
• C) Neither Alternative
• D) Don't take offer from the BDO
• E) Alternative 1 or Alternative 2, as both are essentially same

---

Definitions:

Proposal-Writing Software

A type of software designed to help users create formal proposals in a structured and efficient manner.

Routine Proposals

Proposals that deal with standard, everyday operations within an organization, often following a set format or template.

Proper Structure

The organization of elements in a way that follows accepted rules or standards, ensuring clarity and effectiveness.

Business Report

A formal document that provides information and analysis about a business's operations, performance, or strategy.