You are considering two options in purchasing an automobile:Option A: Purchase the vehicle worth $26,200 and pay for the vehicle over3 years with equal monthly payments at 3% APR financing.Option B: Purchase the vehicle at a discount price of $24,000 to be paid immediately.The funds, which would be used to purchase the vehicle, are presently earning6% annual interest compounded monthly. Which of the following statements isincorrect?(a) If you go with Option A, the monthly payment would be $761.93.(b) Option B is a better choice if you have enough money to purchase in cash.
You are considering two options in purchasing an automobile:Option A: Purchase the vehicle worth $26,200 and pay for the vehicle over3 years with equal monthly payments at 3% APR financing.Option B: Purchase the vehicle at a discount price of $24,000 to be paid immediately.The funds, which would be used to purchase the vehicle, are presently earning6% annual interest compounded monthly. Which of the following statements isincorrect?(a) If you go with Option A, the monthly payment would be $761.93.(b) Option B is a better choice if you have enough money to purchase in cash.
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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Question
You are considering two options in purchasing an automobile:
Option A: Purchase the vehicle worth $26,200 and pay for the vehicle over
3 years with equal monthly payments at 3% APR financing.
Option B: Purchase the vehicle at a discount price of $24,000 to be paid immediately.
The funds, which would be used to purchase the vehicle, are presently earning
6% annual interest compounded monthly. Which of the following statements is
incorrect?
(a) If you go with Option A, the monthly payment would be $761.93.
(b) Option B is a better choice if you have enough money to purchase in cash.
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