Annual rate of interest


Question: Tiger Travel agrees to buy a new aircraft. They can either pay 12,500,000 dollars today, 16,000,000 dollar three years from now, or eight equal annual installments of $2,225,000 [with the 1st payment due one year from now].  Given an annual rate of interest of 9 percent which option should Tiger Travel take?  Explain your answer.

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Finance Basics: Annual rate of interest
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