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In: Finance

You are considering buying a new car for $37,000. If you purchase the car you will...

You are considering buying a new car for $37,000. If you purchase the car you will pay $7,000 of the purchase price as a down payment. Below are two options to choose from. Option 1: Pay off the amount borrowed to purchase the car with a 5 year loan, and the annual percentage rate (APR) will be 0%. Option 2: Receive a $2,000 instant rebate. This will lower your loan amount. Pay off the amount borrowed to purchase the car with a 5 year loan, and the annual percentage rate (APR) will be 3.9%.

PLEASE SHOW ALL EXCEL FUNCTIONS

(A) Which option should you choose? Why?

(B) How much should the rebate be in order to make the two options equal?

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago
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