You and your friend, Edward, have been shopping for your new car for several weeks. Together, you’ve visited several dealerships and your combined negotiating efforts have resulted in an agreed-on price of $26,305. In addition, the dealer has offered you either a rebate of 2,500 or an introductory interest rate of 2.5% APR. If you elect to take advantage of the 2.5% low-cost dealer financing, you’ll also have to pay $986 in finance charges and make monthly payments of $576.45 for four years. Alternatively, you’ve also been preapproved for a four-year 6.3% loan from your credit union. This loan will require payments of $562.34 per month and a 2% down payment. Given this information, what is the adjusted cost of the dealer financing package, rounded to two decimal places?
You and your friend, Edward, have been shopping for your new car for several weeks. Together, you’ve visited several dealerships and your combined negotiating efforts have resulted in an agreed-on price of $26,305. In addition, the dealer has offered you either a rebate of 2,500 or an introductory interest rate of 2.5% APR. If you elect to take advantage of the 2.5% low-cost dealer financing, you’ll also have to pay $986 in finance charges and make monthly payments of $576.45 for four years. Alternatively, you’ve also been preapproved for a four-year 6.3% loan from your credit union. This loan will require payments of $562.34 per month and a 2% down payment. Given this information, what is the adjusted cost of the dealer financing package, rounded to two decimal places?
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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You and your friend, Edward, have been shopping for your new car for several weeks. Together, you’ve visited several dealerships and your combined negotiating efforts have resulted in an agreed-on price of $26,305. In addition, the dealer has offered you either a rebate of 2,500 or an introductory interest rate of 2.5% APR.
If you elect to take advantage of the 2.5% low-cost dealer financing, you’ll also have to pay $986 in finance charges and make monthly payments of $576.45 for four years. Alternatively, you’ve also been preapproved for a four-year 6.3% loan from your credit union. This loan will require payments of $562.34 per month and a 2% down payment.
Given this information, what is the adjusted cost of the dealer financing package, rounded to two decimal places?
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