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(Solved): 5-41 A man had to have the muffler replaced on his 2-year-old car. The repairman offered two altern ...



5-41 A man had to have the muffler replaced on his 2-year-old car. The repairman offered two alternatives. For \( \$ 250 \) he would install a muffler guaranteed for 2 years. But for \( \$ 400 \) he would install a muffler guaranteed "for as long as you own the car." Assuming the present owner expects to keep the car for about 3 more years, which muffler would you advise him to have installed if you thought \( 10 \% \) was a suitable interest rate and the less expensive muffler would only last 2 years?



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