Cm 18) A furniture warehouse is offering a dining room set for a cash price of \( \$ 2500 \) plus tax. They also have an instalment plan of 36 monthly \( \begin{array}{l}\text { a) Calculate the after-tax cash price. } \\ \text { b) Calculate the total cost, by using the store's instalment plan: } \$ 85.00 \text {. } \\ \text { c) What is the difference in cost between the cash price and the } \\ \text { instalment plan? }\end{array} \)

To address the problem, we'll assume a **sales tax rate of 6%**. If your actual tax rate differs, you can adjust the calculations accordingly by replacing the tax rate in the formulas below. ### a) Calculate the After-Tax Cash Price **Cash Price (before tax):** \$2,500 **Sales Tax Rate:** 6% **Calculation:** \[ \text{After-Tax Cash Price} = \text{Cash Price} + (\text{Cash Price} \times \text{Tax Rate}) \] \[ \text{After-Tax Cash Price} = \$2,500 + (\$2,500 \times 0.06) = \$2,500 + \$150 = \$2,650 \] **Answer:** The after-tax cash price is **\$2,650**. --- ### b) Calculate the Total Cost Using the Installment Plan **Monthly Payment:** \$85.00 **Number of Months:** 36 **Calculation:** \[ \text{Total Installment Cost} = \text{Monthly Payment} \times \text{Number of Months} \] \[ \text{Total Installment Cost} = \$85.00 \times 36 = \$3,060 \] **Answer:** The total cost using the installment plan is **\$3,060**. --- ### c) Difference in Cost Between Cash Price and Installment Plan **After-Tax Cash Price:** \$2,650 **Total Installment Cost:** \$3,060 **Calculation:** \[ \text{Difference} = \text{Total Installment Cost} - \text{After-Tax Cash Price} \] \[ \text{Difference} = \$3,060 - \$2,650 = \$410 \] **Answer:** The installment plan costs **\$410** more than the cash price. --- **Summary:** - **After-Tax Cash Price:** \$2,650 - **Total Installment Cost:** \$3,060 - **Difference:** \$410 This means that by choosing the installment plan, you pay an additional \$410 compared to paying the cash price upfront.