The Person KP is looking to purchase a new car where the person is in dilemma about financing decision. The person have two options either dealer finance can be done or loan from the bank can be taken. The person is looking for most appropriate and cost effective financing for new car. Character in the case: Person KP Adequate information: The price of the car model is $34,000. Dealer is offering rebate of $2500 at 2% APR along with down payment of $1000. Monthly payment will be $578 for 60 months. Bank is offering loan at 5% APR. To determine: The most beneficial offer amongst dealer financing and bank loan.

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Chapter 8, Problem 4DTM

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Case summary: The Person KP is looking to purchase a new car where the person is in dilemma about financing decision. The person have two options either dealer finance can be done or loan from the bank can be taken. The person is looking for most appropriate and cost effective financing for new car.

Character in the case: Person KP

Adequate information:The price of the car model is $34,000. Dealer is offering rebate of $2500 at 2% APR along with down payment of $1000. Monthly payment will be $578 for 60 months. Bank is offering loan at 5% APR.

To determine: The most beneficial offer amongst dealer financing and bank loan.

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