Finance: You pick out a new car and the dealer is offering 0% interest for 60...

Finance:

You pick out a new car and the dealer is offering 0% interest for 60 months or a $2,500 cash-back bonus. Your negotiated price is $16,000. Your credit union is currently offering a special 2.6% for 60-month car loans.

a.	What will be your monthly car payment if you accept the 0% interest offer?

Monthly car payment: $266.60

b.	What will be your monthly car payment if you accept the $2,500 cash-back bonus and finance the purchase at your credit union?

Monthly car payment: $195.50

Should you accept the 0% interest offer or the cash-back bonus?

	Answer: Cash-back bonus
	0% interest rate offer

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

Hope this will help, please do comment if you need any further explanation. Your feedback would be appreciated.

jeff jeffy answered 3 months ago

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