Suppose that you decide to buy a car for $60,000, including taxes and license fees. You saved $11,000 for a down payment. The dealer is offering you a choice betwe Incentive A is $4000 off the price of the car, followed by a three-year loan at 7.91%. Incentive B does not have a cash rebate, but provides free financing (no interest) over three years. What is the difference in monthly payments between the two offers? Which incentive is the better deal? Use PMT= The difference in monthly payments between the two offers is (Round to the nearest cent as needed.) Which incentive is the better deal? Choose the correct answer below. P(=) [-(+3)¯] OA. Incentive B is the better deal. OB. Incentive A is the better deal.

Suppose that you decide to buy a car for $60,000, including taxes and license fees. You saved $11,000 for a down payment. The dealer is offering you a choice betwe Incentive A is $4000 off the price of the car, followed by a three-year loan at 7.91%. Incentive B does not have a cash rebate, but provides free financing (no interest) over three years. What is the difference in monthly payments between the two offers? Which incentive is the better deal? Use PMT= The difference in monthly payments between the two offers is (Round to the nearest cent as needed.) Which incentive is the better deal? Choose the correct answer below. P(=) [-(+3)¯] OA. Incentive B is the better deal. OB. Incentive A is the better deal.

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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Consider the following two options proposed by an auto dealer:• Option A: Purchase the vehicle at the normal price of $26,200 and pay forthe vehicle over 36 months with equal monthly payments at 1.9% APRfinancing.• Option B: Purchase the vehicle at a discounted price of $24,048 to be paid immediately.The funds that would be used to purchase the vehicle are presently earning 5% annual interest compounded monthly.Which option is more economically sound?
You want to buy a new sports coupe for $74,900, and the finance office at the dealership has quoted you a loan with an APR of 7.3 percent for 36 months to buy the car. a. What will your monthly payments be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the effective annual rate on this loan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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Barry Wood wants to buy a used car that costs $5000. He has two possible loans in mind. One loan is through the car dealer; it is a three-year add-on interest loan at 6% and requires a down payment of $300. The second is through his credit union; it is a three-year simple interest amortized loan at 7.5% and requires a 10% down payment. (a) Find the monthly payment for each loan. (Give your answer to the nearest cent.) Dealer $ Credit Union $ (b) Find the total interest paid for each loan. (Give your answer to the nearest cent.) Dealer $ Credit Union $
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