Rebate Versus Low Interest Rate. Kyle Parker of Concord, New Hampshire, has been shopping for a new car for several weeks. He has negotiated a price of $34,000 on a model that carries a choice of a $2,500 rebate or dealer financing at 2 percent APR. The dealer loan would require a $1,000 down payment and a monthly payment of $578 for 60 months. Kyle has also arranged for a loan from his bank with a 5 percent APR. Use the Run the Numbers worksheet on page 240 to advise Kyle about whether he should use the dealer financing or take the rebate and get financing from the bank.

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