You and your friend go to the store to buy a new set of headphones when they release. The headphones cost $150. You use your debit card to buy the headphones. Your friend uses their credit card to buy the headphones. Their credit card has a monthly interest rate of 2%. If it takes your friend a year to pay off the headphones, who spends less on the purchase and by how much?(1 point) Responses You spend $36 less than your friend. You spend $36 less than your friend. Your friend spends $3 less than you. Your friend spends $3 less than you. Your friend spends $36 less than you. Your friend spends $36 less than you. You spend $3 less than your friend
You spend $36 less than your friend.
Here is the breakdown of the costs for each payment method:
You:
$150 for the headphones
Your friend:
$150 for the headphones
$150 x 2% = $3 in interest per month
$3 x 12 months = $36 in interest over the course of a year
Since you paid for the headphones in full upfront, you end up spending $36 less than your friend after a year.