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? Oa f you go with Option A, the monthly payment would be $761.93. Ob. Option Bis a better choice if you have enough money to purchase in cash. Oc Option B is a better financing plan, as the net cost of financing is cheaper than Option A. Od. The offective annual yield for your funde is 6.17%.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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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?
O a. If you go with Option A, the monthly payment would be $761.93.
Ob. Option B is a better choice if you have enough money to purchase in cash.
Oc. Option B is a botter financing plan, as the net cost of financing is cheaper than Option A.
Od. The offectivo annual yiold for your funds is 6.17%.
Transcribed Image Text: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? O a. If you go with Option A, the monthly payment would be $761.93. Ob. Option B is a better choice if you have enough money to purchase in cash. Oc. Option B is a botter financing plan, as the net cost of financing is cheaper than Option A. Od. The offectivo annual yiold for your funds is 6.17%.
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