(EAIR in loans) You’re considering buying a new top-of-the-line luxury car.

The car’s list price is $99,000. The dealer has offered you two alternatives for purchasing the car:

• You can buy the car for $90,000 in cash and get a $9,000 discount in the bargain.

• You can buy the car for the list of $99,000. In this case, the dealer is willing to take $39,000 as an initial payment. The remainder of

$60,000 is a “zero-interest loan” to be paid back in equal installments over 36 months.

Alternatively, your local bank is willing to give you a car loan at an annual interest rate of 10%, compounded monthly (that is, 10%/12 per month).

Decide how to finance the car: Bank loan or zero-interest loan with the dealer, or cash payment.