You want to purchase an automobile for $32,383. The dealer offers you​ 0% financing for 48 months or a $6,122 rebate. You can obtain 5.7% financing for 48 months at the local bank.

Question

You want to purchase an automobile for $32,383. The dealer offers you​ 0% financing for 48 months or a $6,122 rebate. You can obtain 5.7% financing for 48 months at the local bank.

1. Which option should you​ choose?

a. rebate - correct answer

b. 0% financing

1. How much money will you save per​ month?

​$ _________ ​(Round to two decimal​ places.)

Answer 1

32383*1.00 4yr

32383-6122=26261

5.7% will cost you 32.780.17.

Formula: fv=p(1+int/c)^(nt)

26261(1+.057/1)^4=$32780.17 (bank)

future value

principal

int

times/yr

yrs

times/yr

Save 32780.17-32383=$397.17 if you pay full price from your pocket.