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1)You decide to purchase a new car.After going through the negotiation process, the car you want costs $25,000.The dealer gives you the choice between two
1)You decide to purchase a new car.After going through the negotiation process, the car you want costs $25,000.The dealer gives you the choice between two incentives for purchasing the new car.The first choice is 0% financing for three years, while the second is a $2000 rebate to be applied to the purchase price of the car. Your bank has approved you for a three year loan at a rate of 2.5%.Which option should youchoose? (Assume that you will not pay off either the 0% loan or the 2.5% loan early and that both option require monthly payments.)
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