You are buying a boat and shipping around. Big boats is willing to drop the list price from $ 15000 to $11250. However, Water ways is willing to give you the same boat for the full list price but only pay$5000 down and the remaining balance at the end of five years. If the interest rate in the market is 10 percent where would buy you boat and why?
Now, assume the Water Ways gave a second option. The other option is to only pay$3000 down, $7000 at the end od the third year and the remaining $5000 at the end of thr fifth year. Assume the same interest rate of 20 percent. Where would you buy the boat and Why?