Question

note: enter your answer and show all the steps that you use to solve this problem in the space provided
you are debating whether to buy a new computer for $1,360.00 with a discount of 10% and sales tax of 6.5% or a refurbished computer with the same equipment for $1,095.00 and sales tax of 5.75%. if a savings account earns a 3.75% apr, how much do you really save with a refurbished computer if you put the difference into the savings account for a year and calculate using the simple interest formula?
be sure to include in your response:

• the answer to the original question
• the mathematical steps for solving the problem demonstrating mathematical reasoning

Explanation:

Step1: Calculate discounted new computer price

$\$1300.00 - (10\% \times \$1300.00) = \$1300.00 - \$130.00 = \$1170.00$

Step2: Add sales tax to new computer

$\$1170.00 + (6.5\% \times \$1170.00) = \$1170.00 + \$76.05 = \$1246.05$

Step3: Calculate refurbished computer total

$\$1095.00 + (5.75\% \times \$1095.00) = \$1095.00 + \$62.96 = \$1157.96$

Step4: Find upfront cost difference

$\$1246.05 - \$1157.96 = \$88.09$

Step5: Calculate simple interest on difference

$I = P \times r \times t = \$88.09 \times 0.0375 \times 1 = \$3.30$

Step6: Total savings (difference + interest)

$\$88.09 + \$3.30 = \$91.39$

Answer:

$\$91.39$