Price: ₱4,248,300
Down Payment: ₱749,700
Interest: 5%
Simple Interest:
3 years
₱637,245
Future Value
₱4,885,545
Compound Interest:
5 years (compounded quarterly)
₱1,198,178.77
Future Value
₱5,446,478.77
Price: ₱2,193,000
Down Payment: ₱387,000
Interest: 5%
Simple Interest:
3 years
₱328,950
Future Value
₱2,521,950
Compound Interest:
5 years (compounded quarterly)
₱618,507.65
Future Value
₱2,811,507.65
Recommendation
As the sales representative, if they want a Subaru Outback I would recommend the payment option in simple interest. This is because in the time frame of 3 years, the payment is reasonable and budget friendly in comparison to compound interest where the price is doubled. As for the Ford Bronco, I would recommend the same option, going with the payment by simple interest is much more convenient to the customer. Given the time frame, this type of payment option ensures the comfort of the customer in paying. With the computation above we can see that compared to compound interest, the payment in simple interest is much more substantial. In conclusion, as a sales representative these are the payment options I would recommend to my customers, keeping in mind their budget and comfortability assuring that their satisfaction comes first.