To buy some furniture,you can put $150 down and "don't pay a cent" for 6 months.At the end of 6 months,you begin making monthly payments of $100 for 2-years.If j₁₂ = 8.4%,what is the equivalent cash price of the furniture?

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The equivalent cash price of the furniture is the present value of the future payments. The future payments consist of the down payment of $150, followed by 24 monthly payments of $100 each. The present value of these payments can be calculated using the formula for the present value of an annuity:PV = PMT * [1 - (1 + r)^-n] / rwhere:PV is the present valuePMT is the monthly paymentr is the monthly interest raten is the number of monthsIn this case, the monthly payment is $100, the monthly interest rate is 8.4% / 12 = 0.7%, and the number of months is 24. Plugging these values into the formula, we get:PV = 100 * [1 - (1 + 0.007)^-24] / 0.007= 100 * [1 - 0.75816] / 0.007= 100 * 0.24184 / 0.007= 2276.68Therefore, the equivalent cash price of the furniture is $2276.68.

To Buy Some Furniture,you Can Put $150 Down and "Don't