Posted by jessica on .
Zaineb is deciding whether to buy a stereo at $695 plus GST and PST now, or to invest the money to buy the stereo in a year. Her account pays 7.35% per annum, compounded monthly. If she can buy the stereo at the same price next year, how much would she save by the investing money?
the answer is $60.76, but I don't know ho they get it.. can someone explain to me..
Cost of stereo: 695
gst + pst: 104.17 (15%)
total cost: 799.17
interest .0735 monthly over 1 year
is: 799.17 x 1.006125^12 = 859.93
Saving is 859.93 - 799.17 = 60.76
Having the answer allowed me to calculate gst + pst. I assume it must
not be included in the cost.