7a. In last Sunday’s Newsday I saw an ad from Rallye Motors featuring financing
ID: 2755254 • Letter: 7
Question
7a. In last Sunday’s Newsday I saw an ad from Rallye Motors featuring financing for a new 328 for $42,650. The offer includes a $1,000 incentive off the list price. The financing offered by BMW North America features a very attractive 60 month financing at only 0.9% compounded monthly with $2,000 down at signing. If you do financing with BMW determine the monthly payments based on the sticker price less the $1,000 incentive, and $2,000 down.
7b. Alternatively, the dealership is offering a $4000 rebate on the original MSRP of the automobile during the month of December. If you decide to take the rebate option you must go to the local bank to arrange financing on the remainder of the purchase price. Suppose the local bank advertises car loans at 4.82% for 5 years compounded monthly. Again suppose you apply a $2,000 down payment to the bank to lessen the periodic payment. Is this a better option than the financing of .9% for 60 months available from BMW? Explain and justify. please answer it with finance calcuater with the wright answer
Explanation / Answer
On using the financing option
On using the rebate function
Date
On comapring Schedule under Financing and Rebate We see that paying more interest of $4,666.72 in comparison to financing option $1,098.04
We should opt for Financing option
Date Payment Principal Interest Total Interest Balance Jan. 2016 $679.13 $643.45 $35.69 $35.69 $39,006.55 Feb. 2016 $679.13 $644.03 $35.11 $70.79 $38,362.52 Mar. 2016 $679.13 $644.61 $34.53 $105.32 $37,717.92 Apr-16 $679.13 $645.19 $33.95 $139.26 $37,072.73 May-16 $679.13 $645.77 $33.37 $172.63 $36,426.96 Jun-16 $679.13 $646.35 $32.78 $205.41 $35,780.61 Jul-16 $679.13 $646.93 $32.20 $237.62 $35,133.68 Aug. 2016 $679.13 $647.51 $31.62 $269.24 $34,486.17 Sept. 2016 $679.13 $648.10 $31.04 $300.27 $33,838.07 Oct. 2016 $679.13 $648.68 $30.45 $330.73 $33,189.39 Nov. 2016 $679.13 $649.26 $29.87 $360.60 $32,540.13 Dec. 2016 $679.13 $649.85 $29.29 $389.88 $31,890.28 Jan. 2017 $679.13 $650.43 $28.70 $418.59 $31,239.85 Feb. 2017 $679.13 $651.02 $28.12 $446.70 $30,588.83 Mar. 2017 $679.13 $651.60 $27.53 $474.23 $29,937.23 Apr-17 $679.13 $652.19 $26.94 $501.17 $29,285.04 May-17 $679.13 $652.78 $26.36 $527.53 $28,632.26 Jun-17 $679.13 $653.36 $25.77 $553.30 $27,978.89 Jul-17 $679.13 $653.95 $25.18 $578.48 $27,324.94 Aug. 2017 $679.13 $654.54 $24.59 $603.07 $26,670.40 Sept. 2017 $679.13 $655.13 $24.00 $627.08 $26,015.27 Oct. 2017 $679.13 $655.72 $23.41 $650.49 $25,359.55 Nov. 2017 $679.13 $656.31 $22.82 $673.31 $24,703.24 Dec. 2017 $679.13 $656.90 $22.23 $695.55 $24,046.34 Jan. 2018 $679.13 $657.49 $21.64 $717.19 $23,388.85 Feb. 2018 $679.13 $658.08 $21.05 $738.24 $22,730.76 Mar. 2018 $679.13 $658.68 $20.46 $758.70 $22,072.09 Apr-18 $679.13 $659.27 $19.86 $778.56 $21,412.82 May-18 $679.13 $659.86 $19.27 $797.83 $20,752.96 Jun-18 $679.13 $660.46 $18.68 $816.51 $20,092.50 Jul-18 $679.13 $661.05 $18.08 $834.59 $19,431.45 Aug. 2018 $679.13 $661.65 $17.49 $852.08 $18,769.81 Sept. 2018 $679.13 $662.24 $16.89 $868.98 $18,107.56 Oct. 2018 $679.13 $662.84 $16.30 $885.27 $17,444.73 Nov. 2018 $679.13 $663.43 $15.70 $900.97 $16,781.29 Dec. 2018 $679.13 $664.03 $15.10 $916.08 $16,117.26 Jan. 2019 $679.13 $664.63 $14.51 $930.58 $15,452.64 Feb. 2019 $679.13 $665.23 $13.91 $944.49 $14,787.41 Mar. 2019 $679.13 $665.82 $13.31 $957.80 $14,121.58 Apr-19 $679.13 $666.42 $12.71 $970.51 $13,455.16 May-19 $679.13 $667.02 $12.11 $982.62 $12,788.14 Jun-19 $679.13 $667.62 $11.51 $994.13 $12,120.51 Jul-19 $679.13 $668.23 $10.91 $1,005.03 $11,452.29 Aug. 2019 $679.13 $668.83 $10.31 $1,015.34 $10,783.46 Sept. 2019 $679.13 $669.43 $9.71 $1,025.05 $10,114.03 Oct. 2019 $679.13 $670.03 $9.10 $1,034.15 $9,444.00 Nov. 2019 $679.13 $670.63 $8.50 $1,042.65 $8,773.37 Dec. 2019 $679.13 $671.24 $7.90 $1,050.54 $8,102.13 Jan. 2020 $679.13 $671.84 $7.29 $1,057.84 $7,430.29 Feb. 2020 $679.13 $672.45 $6.69 $1,064.52 $6,757.84 Mar. 2020 $679.13 $673.05 $6.08 $1,070.61 $6,084.79 Apr-20 $679.13 $673.66 $5.48 $1,076.08 $5,411.13 May-20 $679.13 $674.26 $4.87 $1,080.95 $4,736.87 Jun-20 $679.13 $674.87 $4.26 $1,085.22 $4,062.00 Jul-20 $679.13 $675.48 $3.66 $1,088.87 $3,386.52 Aug. 2020 $679.13 $676.09 $3.05 $1,091.92 $2,710.43 Sept. 2020 $679.13 $676.69 $2.44 $1,094.36 $2,033.74 Oct. 2020 $679.13 $677.30 $1.83 $1,096.19 $1,356.44 Nov. 2020 $679.13 $677.91 $1.22 $1,097.41 $678.52 Dec. 2020 $679.13 $678.52 $0.61 $1,098.02 $0.00 Total $40,747.80 $39,649.99 $1,098.04Related Questions
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