The following are two popular approaches used by automobile dealers: (a) Cash Re
ID: 2639329 • Letter: T
Question
The following are two popular approaches used by automobile dealers: (a) Cash Rebate Versus Low Rate Dealer Financing You are given two mutually exclusive options from the dealer on a $20,000 car: (i) $1,500 cash rebate or (ii) 36-month low rate loan at 3% APR. The prevailing APR on 36-month auto loan from a typical bank is 8%. Which option is a better deal? (b) Buying Versus Leasing You are interested in a $25,000 car. A simplified leasing contract includes the following: (i) upfront cost of $3,000, (ii) $400 monthly lease payment over a 36-month period, and (iii) purchase cost of $12,000 at the end of the lease. What are the
Explanation / Answer
Solution (a)
Under cash rebate
Car Cost (cost
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.