In August 2008, a car manufacturing company was offering the choice of a 3.3% loan for 72 months, or $3000 cash back on the purchase of a $25,377 car. (a) If someone took the 3.3% loan offer, how much will the monthly payment be? (b) If someone took the $3000 cash-back offer and can borrow money from their local credit union at 7.6% interest compounded monthly for six years, how much will the monthly payment be? (c) Which of the two offers is more favorable?

In August 2008, a car manufacturing company was offering the choice of a 3.3% loan for 72 months, or $3000 cash back on the purchase of a $25,377 car. (a) If someone took the 3.3% loan offer, how much will the monthly payment be? (b) If someone took the $3000 cash-back offer and can borrow money from their local credit union at 7.6% interest compounded monthly for six years, how much will the monthly payment be? (c) Which of the two offers is more favorable?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 15P

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