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(a) What would Rich's monthly payment be if he takes the 5- year 0% financing? Monthly payment for 5-year 0% financing = $500.00 (Note: Your answer should include a dollar sign and be accurate to two decimal places) (b) What would Rich's monthly payment be if he takes the $5,000 rebate?

(a) What would Rich's monthly payment be if he takes the 5- year 0% financing? Monthly payment for 5-year 0% financing = $500.00 (Note: Your answer should include a dollar sign and be accurate to two decimal places) (b) What would Rich's monthly payment be if he takes the $5,000 rebate?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Rich buys a car for $30,000 and has two options for financing. The dealership offers either financing of 0% compounded monthly for 5-years, or a $5,000 cash rebate. If Rich takes the rebate, then he will apply the rebate to the cost of the car and finance the remaining balance with a loan for 5-years at 3.85% compounded monthly through the Tiger's Credit Union. (a) What would Rich's monthly payment be if he takes the 5- year 0% financing? Monthly payment for 5-year 0% financing = $500.00 (Note: Your answer should include a dollar sign and be accurate to two decimal places) (b) What would Rich's monthly payment be if he takes the $5,000 rebate? Monthly payment with $5,000 rebate $343.81 R 1-11 11.
Transcribed Image Text:Rich buys a car for $30,000 and has two options for financing. The dealership offers either financing of 0% compounded monthly for 5-years, or a $5,000 cash rebate. If Rich takes the rebate, then he will apply the rebate to the cost of the car and finance the remaining balance with a loan for 5-years at 3.85% compounded monthly through the Tiger's Credit Union. (a) What would Rich's monthly payment be if he takes the 5- year 0% financing? Monthly payment for 5-year 0% financing = $500.00 (Note: Your answer should include a dollar sign and be accurate to two decimal places) (b) What would Rich's monthly payment be if he takes the $5,000 rebate? Monthly payment with $5,000 rebate $343.81 R 1-11 11.
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