You are debating about whether to buy a new computer for $800.00 or a refurbished computer with the same equipment for $640.00.
If a savings account earns 4.5% APR interest, how much do you really save with a refurbished computer if you put the difference into the savings account for a year?
Firstly, we need to find the difference between the two. First, we have to take a grand total of $800 and subtract it by the used/refurbished total of $640. After we subtract the two, we would get $160. Next, we want to multiply the $160 by our interest rate. In this case, the interest rate is 4.5%. To convert this to a decimal, we do 0.045. When we multiply $160 by 0.045 we get $7.20. So the final total would be $167.20.
