Math 123

Mini project: Rent to own?

Due December 10

In this project, you will investigate practices of rent to own companies. Please answer all the questions.

  1. Look at the flyer I also attached. What is it telling you? More importantly what is it not telling you? Do you think it’s a good deal to pay $14 a month for a refrigerator? Explain.
  1. Do some research either online, or if you are really ambitious locally, and try to find the pricing of products if a rent-to-own company. I personally had little luck. When I went to the store, they told me to look online. When I looked online, they told me to call the store. Why do you think it has been so hard for me to find this information?
  1. If you were successful in finding pricing from a store or online, continue to the next question. If you weren’t, check out this website: It is not ideal, but it will give you an idea about prices and interest rates.
  1. Use percents to answer the following question: Would you rent to own (a TV, computer, appliance, furniture)? You should choose a specific item and compute, if possible, how much it would cost you if:
  2. Paying cash at a retail store
  3. Paying cash at the rent to own store
  4. Paying with a credit card at a retail store (assume interest rates are approximately 18%)
  5. Renting to own.

In particular, I want you to tell me the interest rate you are paying if you are renting to own. Of course, you can do any other mathematical analysis you wish as well, but at least answer this question.

  1. Write a half-page commentary about rent to own businesses. Consider also that rent to own businesses, just like check cashing businesses are usually located in poor neighborhoods. If you wish, you can do more research. The Internet abounds with information.

Something else to think about: you don’t have to turn anything in, but think about it. You have probably seen signs on stores that promise that you can buy an item with “no money down until 2010.” Why do you think stores offer this? Aren’t they losing money if there are no payments for a year, especially due to inflation?