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Given exchange rate: 1 USD = 3,850 UGX.

April 19, 2026Economics

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Step-by-step solution

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Convert the car's value from USD to UGX.
Given exchange rate: $1 \text{ USD} = 3,850 \text{ UGX}$ .
Car value in UGX:
$8,900 \text{ USD} \times 3,850 \frac{\text{UGX}}{\text{USD}} = 34,265,000 \text{ UGX}$
a) Compare the two payment options Livingstone has for purchasing the car.
Calculate the cost for Option 1.
Option 1: Pay the full amount in cash and receive a 5% discount.
Discount amount:
$5\% \times 34,265,000 \text{ UGX} = 0.05 \times 34,265,000 \text{ UGX} = 1,713,250 \text{ UGX}$
Cost for Option 1:
$34,265,000 \text{ UGX} - 1,713,250 \text{ UGX} = 32,551,750 \text{ UGX}$
Calculate the cost for Option 2.
Option 2: Pay a deposit of UGX 10,000,000, then clear the balance in six equal monthly

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