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You would like to purchase a $1,000 sofa from Honest Furniture store. The owner, Mr. Honest, says he will work with you to arrange a payment plan over the next 12 months He says he normally charges 12% interest per year and calculates the interest on $1,000 at 12 as $120. which makes the total $1120. He then divides $1,120 by 12 months, which makes the monthly payment $93.33. He then says, "I feel generous today, just pay me $90 at the end of each month for a year." Perform the necessary analysis and determine whether there is anything wrong with this deal and Mr. Honest's statements. 

Financial Management, Finance

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