A Wall Street Journal article discusses how to compare car offers from GM, Ford, and Chrysler. Lets focus on comparing the financing arrangements offered by those three. The article assumes that you buy a car with a $10,000 base sticker price that will be financed using a 48-month loan with a 20% down payment and fixed monthly payments. The market rate for car loans is 16.5% A.P.R. (Annual Percentage Rate) compounded monthly. The article compares the following three schemes:

i) Chrysler offers no concessions (you would have to finance the car loan at the market rate).

ii) Ford offers a 6% rebate that reduces your down payment (again, you would have to finance the car loan at the market rate).

iii) GM offers loans below market rate at 12.8% A.P.R. (compounded monthly).

The article compares the three offers in the following way:

	Monthly payment	Total payment
Chrysler	$228.78	$12,981.44
Ford	$228.78	$12,381.44
GM	$213.84	$12,264.32

and concludes that GM offers the best deal because it has the lowest total payment.

How did the Wall Street Journal arrive at those numbers? Show the analysis that leads to both the monthly and total payments for each of the three offers.

Why is the analysis in the Wall Street Journal incorrect?

What is an appropriate way of comparing those three offers? Perform the correct analysis.

Which company offers the best deal?