Question

   You are buying a car for $30,000 and have three options—all of which will take 60 months to pay. The first option gives a $3000 discount on the car, but charges 5.9% financing. The second option pays for the car at the full price, but charges 1.9% financing. The third option is also discounted $3000 but at 5.5% financing and has a $5000 balloon payment. Which option will cost the least amount of money?

Answer 1

Option 1
Vehicle Price	$30,000
Discount	$3,000
Loan to be taken	$27,000
Interest	5.90%
Interest per month	0.4917%
EMI for 60 Months:	(27000*0.004917*(1.004917)^60)/((1.004917)^60-1)
	$520.730
Toatl cost	$520.73	*60
	$31,243.80

Option 2
Vehicle Price	$30,000
Discount	$0
Loan to be taken	$30,000
Interest	1.90%
EMI for 60 Months:	$524.52
Toatl cost	$524.52	*60
	$31,471.20
Option 3
Vehicle Price	$30,000
Discount	$3,000
Ballon Payment	$5,000
Loan to be taken	$27,000
Interest	5.50%
EMI for 60 Months:	$443.14
Ballon Payment	$5,000
Toatl cost of EMI	$443.14	*60
	$26,588.40
Add:Ballon payment	$5,000
	$31,588.40

Option 1 is less cost of $ 31243.

EMI table for Option3

Month	Balance	Principal	Interest	Payment
1	$   27,000.00	$     319.39	$ 123.75	$     443.14
2	$   26,680.61	$     320.86	$ 122.29	$     443.14
3	$   26,359.75	$     322.33	$ 120.82	$     443.14
4	$   26,037.42	$     323.80	$ 119.34	$     443.14
5	$   25,713.62	$     325.29	$ 117.85	$     443.14
6	$   25,388.33	$     326.78	$ 116.36	$     443.14
7	$   25,061.55	$     328.28	$ 114.87	$     443.14
8	$   24,733.28	$     329.78	$ 113.36	$     443.14
9	$   24,403.50	$     331.29	$ 111.85	$     443.14
10	$   24,072.20	$     332.81	$ 110.33	$     443.14
11	$   23,739.39	$     334.34	$ 108.81	$     443.14
12	$   23,405.05	$     335.87	$ 107.27	$     443.14
13	$   23,069.19	$     337.41	$ 105.73	$     443.14
14	$   22,731.78	$     338.95	$ 104.19	$     443.14
15	$   22,392.82	$     340.51	$ 102.63	$     443.14
16	$   22,052.31	$     342.07	$ 101.07	$     443.14
17	$   21,710.24	$     343.64	$     99.51	$     443.14
18	$   21,366.61	$     345.21	$     97.93	$     443.14
19	$   21,021.40	$     346.79	$     96.35	$     443.14
20	$   20,674.60	$     348.38	$     94.76	$     443.14
21	$   20,326.22	$     349.98	$     93.16	$     443.14
22	$   19,976.24	$     351.58	$     91.56	$     443.14
23	$   19,624.65	$     353.20	$     89.95	$     443.14
24	$   19,271.46	$     354.81	$     88.33	$     443.14
25	$   18,916.64	$     356.44	$     86.70	$     443.14
26	$   18,560.20	$     358.07	$     85.07	$     443.14
27	$   18,202.13	$     359.72	$     83.43	$     443.14
28	$   17,842.41	$     361.36	$     81.78	$     443.14
29	$   17,481.05	$     363.02	$     80.12	$     443.14
30	$   17,118.03	$     364.68	$     78.46	$     443.14
31	$   16,753.34	$     366.36	$     76.79	$     443.14
32	$   16,386.98	$     368.04	$     75.11	$     443.14
33	$   16,018.95	$     369.72	$     73.42	$     443.14
34	$   15,649.23	$     371.42	$     71.73	$     443.14
35	$   15,277.81	$     373.12	$     70.02	$     443.14
36	$   14,904.69	$     374.83	$     68.31	$     443.14
37	$   14,529.86	$     376.55	$     66.60	$     443.14
38	$   14,153.32	$     378.27	$     64.87	$     443.14
39	$   13,775.04	$     380.01	$     63.14	$     443.14
40	$   13,395.04	$     381.75	$     61.39	$     443.14
41	$   13,013.29	$     383.50	$     59.64	$     443.14
42	$   12,629.79	$     385.26	$     57.89	$     443.14
43	$   12,244.53	$     387.02	$     56.12	$     443.14
44	$   11,857.51	$     388.80	$     54.35	$     443.14
45	$   11,468.72	$     390.58	$     52.56	$     443.14
46	$   11,078.14	$     392.37	$     50.77	$     443.14
47	$   10,685.77	$     394.17	$     48.98	$     443.14
48	$   10,291.61	$     395.97	$     47.17	$     443.14
49	$     9,895.64	$     397.79	$     45.35	$     443.14
50	$     9,497.85	$     399.61	$     43.53	$     443.14
51	$     9,098.24	$     401.44	$     41.70	$     443.14
52	$     8,696.80	$     403.28	$     39.86	$     443.14
53	$     8,293.51	$     405.13	$     38.01	$     443.14
54	$     7,888.38	$     406.99	$     36.16	$     443.14
55	$     7,481.40	$     408.85	$     34.29	$     443.14
56	$     7,072.54	$     410.73	$     32.42	$     443.14
57	$     6,661.82	$     412.61	$     30.53	$     443.14
58	$     6,249.21	$     414.50	$     28.64	$     443.14
59	$     5,834.71	$     416.40	$     26.74	$     443.14
60	$     5,418.31	$     418.31	$     24.83	$     443.14
balloon	$     5,000.00	$ 5,000.00	----------	$ 5,000.00