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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
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
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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
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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