"Zero percent financing" means the obvious thing-that no interest is belng charged on the loan. So if we borrow $1200 at 0% interest and pay it off over 12 months, our monthly payment will be $1200/12 = $100. Suppose you are buying a new truck at a price of $10,000. You plan to finance your purchase with a loan you will repay over two years. The dealer offers two options: either dealer financing with 0% interest, or a $1000 rebate on the purchase price. If you take the rebate, you will have to go to the local bank for a loan (of $9,000) at an APR of 6.59%. What would your monthly payment be if you took the rebate? (Round your answer to the nearest cent.) What would your monthly payment be if you used dealer financing? (Round your answer to the nearest cent.) Should you take the dealer financing or the rebate? (Assume you take the deal that saves you the most money.) O dealer financing O rebate How much would you save over the life of the loan by taking the option you chose? (Round your answer to the nearest cent.)

"Zero percent financing" means the obvious thing-that no interest is belng charged on the loan. So if we borrow $1200 at 0% interest and pay it off over 12 months, our monthly payment will be $1200/12 = $100. Suppose you are buying a new truck at a price of $10,000. You plan to finance your purchase with a loan you will repay over two years. The dealer offers two options: either dealer financing with 0% interest, or a $1000 rebate on the purchase price. If you take the rebate, you will have to go to the local bank for a loan (of $9,000) at an APR of 6.59%. What would your monthly payment be if you took the rebate? (Round your answer to the nearest cent.) What would your monthly payment be if you used dealer financing? (Round your answer to the nearest cent.) Should you take the dealer financing or the rebate? (Assume you take the deal that saves you the most money.) O dealer financing O rebate How much would you save over the life of the loan by taking the option you chose? (Round your answer to the nearest cent.)

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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