Suppose that you decide to buy a car for $65,000, including taxes and license fees. You saved $13,000 for a down payment. The dealer is offering you a choice between two incentives. Incentive A is $7000 off the price of the car, followed by a three-year loan at 6.37%. 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?
Suppose that you decide to buy a car for $65,000, including taxes and license fees. You saved $13,000 for a down payment. The dealer is offering you a choice between two incentives. Incentive A is $7000 off the price of the car, followed by a three-year loan at 6.37%. 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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Suppose that you decide to buy a car for $65,000, including taxes and license fees. You saved $13,000 for a down payment. The dealer is offering you a choice between two incentives. Incentive A is $7000 off the price of the car, followed by a three-year loan at 6.37%.
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?
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