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Brisbane Private School offers the following payment options:
1. Pay $10,000 today, or
2. Make 10 monthly payments of $1,018 starting today.
If you borrow at 7% p.a. compounded monthly, which option is the cheapest?
A. Pay $10,000
B. Payment plan $9,918
C. Payment plan $9,961
D. Payment plan $8,975
The course coordinator said the answer is B. Would someone please be able to show me full working out on how to solve this question including converting the interest rate and the formula needed?
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