Joshua is in college, and his computer broke. He can get it repaired, but it will take three weeks. What is the best decision that Joshua can make if he wants to spend the least amount of money?
Rent a computer for three weeks
This is the right decision for Joshua to spend the least money. His broken computer will be repaired in three weeks, and he will only incur the costs of repair and rent expense. Total expenditure will be significantly lower than acquiring a new computer.
Pay cash for a new computer
This would be considered a hastily made decision by Joshua. Paying cash for a new computer is way more expensive than the three weeks’ rent expense. This decision would result in more financial expenditure, like would be the case with a rent-to-own program.
Use a rent-to-own program to buy a new computer
This decision is wrong because Joshua’s computer is not broken beyond repair. He does not need a new computer. All he wants is a backup to use for three weeks. Using a rent-to-own program would beat the purpose of having his new computer repaired in the first place. He would spend more money in the long run on this rent-to-own program.
Use an installment plan to buy a new computer
An instalment plan would potentially be more expensive than paying on cash and the rent-to-won program. This approach is risky because the computer bought in an instalment will be his only after paying up to the last instalment. The computer ownership would remain with the seller, and they would repossess it if Joshua did not honour any of his instalments.