Sara wishes to purchase a stereo system. She is offered the following payment options:
Option 1:
$ 0 down
$ 429 in 1 year
$ 300 in 2 years
Option 2:
$ 80 down
$ 250 in 1 year
$ 400 in 2 years
Determine the range of interest rates for which the present value of Option 2 is less than the present value of Option 1.
Lower limit of range =
?
Upper limit of range =
?
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