Question

Tom is in dire need of a new washing machine. He knows what model he would like to get, but doesn't have the cash to pay for it. He plans to get a line of credit (credit card) at the store when he purchases his new washer. He found four different stores that carry the same washing machine for different prices. The lines of credit they offer also come with different APRs. Tom's primary goal is to minimize his monthly payment as he pays the washing machine off over the next 18 months. From which of the four stores should Tom purchase his washing machine?

Answer 1

I don't have the four stores' prices and APRs — please send those and I will calculate which gives the smallest monthly payment.

Meanwhile, here's exactly how to decide and how I'll compute it for you:

1) Use an amortizing monthly payment formula. For price (loan principal) P, annual APR A (as a decimal), monthly rate r = A/12, and number of months n = 18, the fixed monthly payment is

PMT = P * r / (1 − (1 + r)^(-n)).

(If a card uses a different compounding convention, tell me that; for most comparisons use nominal APR/12 as above.)

2) Practical notes
- If any store offers a 0% promotional APR for 18 months, the monthly payment is simply P / 18.
- If there are financing fees, down payments, sales tax, or delivery charges, include those in P.
- If the card requires interest-only or minimum payments instead of an amortizing schedule, give those terms.

3) How I’ll present the result
- I will compute each store’s PMT and pick the smallest monthly payment.
- I can show the numeric steps and the total amount paid over 18 months for each store if you want.

4) Example (illustration)
If P = $1,000 and APR = 18% → r = 0.18/12 = 0.015, n = 18:
PMT = 1000 * 0.015 / (1 − 1.015^(−18)) ≈ $63.83/month.

Send the four stores’ prices and APRs (and any fees or promo details) and I’ll compute and pick the best one.