Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. you need a new car and the dealer has offered you

You need a new car and the dealer has offered you a price of $20,000,...

90.2K

Verified Solution

Question

Finance

image

You need a new car and the dealer has offered you a price of $20,000, with the following payment options: (a) pay cash and receive a $2,000 rebate, or (b) pay a $5,000 down payment and finance the rest with a 0% APR loan over 30 months. But having just quit your job and started an MBA program, you are in debt and you expect to be in debt for at least the next 2 72 years. You plan to use credit cards to pay your expenses; luckily you have one with a low (fixed) rate of 13.22% APR. Which payment option is best for you? Your monthly discount rate is %. (Round to four decimal places.) For you, the present value of option (b) is $. (Round to the nearest dollar.) Which is the correct decision and why? (Select the best choice below.) A. Accept option (a) because it is more expensive than option (b). B. Accept option (a) because it is less expensive than option (b). O C. Accept option (b) because it is more expensive than option (a). OD. Accept option (b) because it is less expensive than option (a)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Accounting
1.2K views

Schedule of Cash ReceiptsDel Spencer is the owner and founder of Del Spencer's Men'sClothing...Schedule...

Psychology
1.2K views

what physical therapist License Requirements Florida?

Biology
1.2K views

When you carry an object in your hand, activity in which receptors tells you that...

Physics
1.2K views

10 A spring of force constant K is first stretched by distance a from its...

Basic Math
1.2K views

If you take out a balloon loan of 36 000 for 6 years at a...

Basic Math
1.2K views

You and your spouse are in good health and have reasonably secure jobs Each of...

Basic Math
1.2K views

George made the box plots to compare the number of calories between his morning snacks...

Basic Math
1.2K views

The function f(x) = 6x + (4/x) has: a local minimum at x = with...

Calculus
1.2K views

Let f(x) = ?2Determine the derivative of f.f'(x) = ______Determine the slope of f at...

Calculus
1.2K views

Which of the following shows the simplified function of sin x/1- cos x

Accounting
1.2K views

! Required Information [The following Information applies to the questions displayed below.] ...

Accounting
1.2K views

A lease agreement that qualifies as a finance lease calls for annual lease payments of...