Consider the following two options proposed by an auto dealer: Option A: purchase the vehicle at...

Consider the following two options proposed by an auto dealer: Option A: purchase the vehicle at the normal price of $50,000 and pay for the vehicle over 48 months with equal monthly payments at 3% APR financing. Option B: purchase the vehicle at a discounted price of $48,056.90 to be paid immediately. The funds that would be used to purchase the vehicle are presently in a savings account that earns 5% compounded monthly. Which option is more economically sound?

Option A

Option B

None of the options

They are equal

Expert Solution

jeff jeffy answered 2 years ago

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