You have been given a choice of paying $20,000 for a new GM car with a $3,000 cash rebate (net cost of $17,000 which you finance separately), or zero percent financing for 48 months with no cash rebate. What is the implicit rate of interest in this deal?
You have been given a choice of paying $20,000 for a new GM car with a $3,000 cash rebate (net cost of $17,000 which you finance separately), or zero percent financing for 48 months with no cash rebate. What is the implicit rate of interest in this deal?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 15P
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![You have been given a choice of paying $20,000 for a new GM car with a $3,000 cash rebate (net cost of $17,000
which you finance separately), or zero percent financing for 48 months with no cash rebate. What is the implicit rate
of interest in this deal?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbc84ced7-9c96-4447-a289-6562c3acf3ca%2Fc6298608-887b-4979-9da7-a62945d69ded%2F835r2ct_processed.png&w=3840&q=75)
Transcribed Image Text:You have been given a choice of paying $20,000 for a new GM car with a $3,000 cash rebate (net cost of $17,000
which you finance separately), or zero percent financing for 48 months with no cash rebate. What is the implicit rate
of interest in this deal?
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