Tom has offered to sell Julian his motorcycle for $1,200. Julian knows this is a very good deal, since the same motorcycle can be purchased at the dealership for $1,800. Since Julian doesn’t have $1,200 and Tom does not accept credit cards, they both think a cash advance might be a good idea. Julian’s credit card company can offer him a cash advance for the $1,200 he needs at an interest rate of 26%. He would then pay off the balance in 24 months. Should Julian use the cash advance to purchase the motorcycle?
no, i don't think Julian should use the cash advance to purchase the motor cycle. The price of the motorcycle in the dealership is $1,800 If Julian use his credit card to get cash, he need to pay $1500 + 26 %x 1,500 = $1,890 It would be cheaper if Julian just buy it form the dealership hope this helps