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How much total interest will Pronghorn pay on this payment

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Question - Pronghorn Excavating Inc. is purchasing a bulldozer. The equipment has a price of $104,300. The manufacturer has offered a payment plan that would allow Pronghorn to make 9 equal annual payments of $19,574.91, with the first payment due one year after the purchase.

How much total interest will Pronghorn pay on this payment plan?

Pronghorn could borrow $104,300 from its bank to finance the purchase at an annual rate of 11%.

Should Pronghorn borrow from the bank or use the manufacturer's payment plan to pay for the equipment?

Reference no: EM132576013

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