Billy Bob would like to purchase a new truck. The salesman has given BB 2 options for financing his truck. He can finance the $30,000 loan at 0% for 60 months, or he can receive a rebate amount and finance with his bank. He will apple the $2000 rebate and finance the difference if he finances with his bank. His bank is offering a rate of 5% for a 60 month loan. a. What is BBs payment if he takes the dealers 0% offer ? (30000, 60) b. what is BBs payment if he applies the rebate to reduce the loan amount and finances with his bank? (loan amount 28000, rate& term 0.05, 60)
Billy Bob would like to purchase a new truck. The salesman has given BB 2 options for financing his truck. He can finance the $30,000 loan at 0% for 60 months, or he can receive a rebate amount and finance with his bank. He will apple the $2000 rebate and finance the difference if he finances with his bank. His bank is offering a rate of 5% for a 60 month loan. a. What is BBs payment if he takes the dealers 0% offer ? (30000, 60) b. what is BBs payment if he applies the rebate to reduce the loan amount and finances with his bank? (loan amount 28000, rate& term 0.05, 60)
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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Billy Bob would like to purchase a new truck. The salesman has given BB 2 options for financing his truck. He can finance the $30,000 loan at 0% for 60 months, or he can receive a rebate amount and finance with his bank. He will apple the $2000 rebate and finance the difference if he finances with his bank. His bank is offering a rate of 5% for a 60 month loan.
a. What is BBs payment if he takes the dealers 0% offer ? (30000, 60)
b. what is BBs payment if he applies the rebate to reduce the loan amount and finances with his bank? (loan amount 28000, rate& term 0.05, 60)
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