Suppose that you decide to buy a car for $57,000, including taxes and license fees. You saved $11,000 for a down payment. The dealer is offering you a choice between two incentives. Incentive A is $4000 off the price of the car, followed by a four-year loan at 6.38%. Incentive B does not have a cash rebate, but provides free financing (no interest) over four years. What is the difference in monthly payments between the two offers? Which incentive is the better deal? Use PMT= PA n [-]

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
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Suppose that you decide to buy a car for $57,000, including taxes and license fees. You saved $11,000 for a down
payment. The dealer is offering you a choice between two incentives.
Incentive A is $4000 off the price of the car, followed by a four-year loan at 6.38%.
Incentive B does not have a cash rebate, but provides free financing (no interest) over four years.
What is the difference in monthly payments between the two offers? Which incentive is the better deal? Use
[-(19)
PMT=-
***
The difference in monthly payments between the two offers is $.
(Round to the nearest cent as needed.)
Transcribed Image Text:Suppose that you decide to buy a car for $57,000, including taxes and license fees. You saved $11,000 for a down payment. The dealer is offering you a choice between two incentives. Incentive A is $4000 off the price of the car, followed by a four-year loan at 6.38%. Incentive B does not have a cash rebate, but provides free financing (no interest) over four years. What is the difference in monthly payments between the two offers? Which incentive is the better deal? Use [-(19) PMT=- *** The difference in monthly payments between the two offers is $. (Round to the nearest cent as needed.)
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