A young couple has made a deposit of the first month's rent (equal to $1,000) on a 6-month apartment lease. The deposit is refundable at the end of six months if they stay until the end of the lease. The next day they find a different apartment that they like just as well, but its monthly rent is only $900. And they would again have to put a deposit of $900 refundable at the end of 6 months. They plan to be in the apartment only 6 months. Should they switch to the new apartment?

It would be wiser for the couple to stay in the old apartment and save $1400

Explanation:

If they stay until the end of the lease, total money that will be paid out is $1000 x 6 = $6000,

If they leave, they'll have to forgo $1000.

If they move to their new apartment, they'll pay $900 x 6 = $5400

total expenditure if they move to the new place at the end of the six months period will be, the $1000 that will not be refunded back to them on the old apartment, plus this new $5600 for six month's rent in this new apartment, and that will be a total of $6400.

It would be wiser for the couple to stay in the old apartment and save $1400

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

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um sure