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There would be a performance gain going from the i5 to i7 processor, but the performance increase is negligible and is not worth the $200. However, it's likely your dad will have multiple photoshop files and windows open which gobbles RAM like no tomorrow. I'd encourage you to get the RAM upgrade to 8 GB. Your processor will always be able to tackle anything you throw at it, but with newer Photoshop releases taking up more and more RAM - you can run out of RAM.

So yes, that system with the RAM upgrade would be well-suited for your scenario.

Thank you so much