Chris is renting a house, and it does not have a refrigerator. A refrigerator is worth $3 every day because Chris will eat out less. Refrigerators usually last 5 years. Chris has a discount rate of 18%.
1. Discuss how much is Chris willing to spend on a refrigerator?
2. Lowe's is offering a financing deal with 10% down payment and payments spread over five years. Every year of payments equals 25% of the purchase price. Discuss how much is Chris willing to spend on the fridge.