Answer:
The second option is the better deal.
Explanation:
Considering the 3% rate
we can: purchase the 1,000 dollars TV and earn the interest on the account.
This will make an amount of
[tex]Principal \: (1+ r)^{time} = Amount[/tex]
Principal 985.00
time 1.00
rate 0.03000
[tex]985 \: (1+ 0.03)^{1} = Amount[/tex]
Amount 1,014.55
Thus, we end up with 14.55 dollars and a TV
In the other case, we purchase the 985 dollars now and capitalize the 15 dollars:
[tex]Principal \: (1+ r)^{time} = Amount[/tex]
Principal 15.00
time 1.00
rate 0.03000
[tex]15 \: (1+ 0.03)^{1} = Amount[/tex]
Amount 15.45
We end up with 15.45 dollars
As this option yields a better result we should use this option.
