Option A: Buying a car at a discounted price of $24,048 in cash now. Option B: Buying a car at the normal price of $26,200 and pay for the car over 36 months with equal monthly payments at 1.9% Annual Percentage Rate (APR) financing. The funds that would be used to purchase the vehicle are presently earning 5% annual interest compounded monthly How much the saving in present value with the cash payment option?
Option A: Buying a car at a discounted price of $24,048 in cash now. Option B: Buying a car at the normal price of $26,200 and pay for the car over 36 months with equal monthly payments at 1.9% Annual Percentage Rate (APR) financing. The funds that would be used to purchase the vehicle are presently earning 5% annual interest compounded monthly How much the saving in present value with the cash payment option?
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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Give me right solution according to the question... If get answer other than given options please leave it.
Transcribed Image Text:Option A: Buying a car at a discounted
price of $24,048 in cash now.
Option B: Buying a car at the normal price of
$26,200 and pay for the car over 36 months
with equal monthly payments at 1.9%
Annual Percentage Rate (APR) financing.
The funds that would be used to purchase
the vehicle are presently earning 5% annual
interest compounded monthly
How much the saving in present value with
the cash payment option?
O
$ 2,152
$ 1,033
$ 952
$ 830.12
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