Scott wants to purchase a Toyota Rav4 XLE. The model he wants is available for $26,789. Scott has saved $4,000 for a down payment, and the dealer has offered $3,500 for his trade- in. He is considering three financing options. Toyota's financial department is offering 0% interest for three years. Scott's credit union is offering 1.98% compounded monthly for four years. His bank is offering 2.97% compounded monthly for five years. Your assignment: a) What would Scott's monthly loan payment be for each option? b) What total amount of interest would Scott pay for each option? c) Describe the advantages and disadvantages of each financing option. If you were Scott, which of these three financing options would you use and why?

Karim Soltan is shopping for a new vehicle, and has noticed that many vehicle manu-facturers are offering special deals to sell off the current year’s vehicles before the new models arrive. Karim’s local Ford dealership is advertising 3.9% financing for a full 48 months (i.e., 3.9% compounded monthly) or up to $4000 cash back on selected vehicles. The vehicle that Karim wants to purchase costs $24 600 including taxes, delivery, licence, and dealer preparation. This vehicle qualifies for $1800 cash back if Karim pays cash for the vehicle. Karim has a good credit rating and knows that he could arrange a vehicle loan at his bank for the full price of any vehicle he chooses. His other option is to take the dealer financing offered at 3.9% for 48 months. Karim wants to know which option requires the lower monthly payment. He knows he can use annuity formulas to calculate the monthly payment.QUESTIONS  Suppose Karim buys the vehicle on July 1. What monthly payment must Karim make if he…

Mayfair Fashions has a $90,000 line of credit from the Bank of Montreal. Interest at prime plus 2% is deducted from Mayfair’s chequing account on the twenty-fourth of each month. Mayfair initially drew down $40,000 on March 8 and another $15,000 on April 2. On June 5, $25,000 of principal was repaid. If the prime rate was 5.25% on March 8 and rose by 0.25% effective May 13, what were the first four interest deductions charged to the store’s account? (Round your answers to the nearest cent.)