After about 10 months of saving $500 a month, Mary has achieved her goal of saving $ 5,000 that she will use as a down payment on a new car. Marys new car is priced at $25,000 plus 8.75% sales tax. She will receive a $1,500 trade in credit on her existing car and will make a $5,000 down payment on the new car. When she went to a dealer, the dealer offered the following two options:

Option 1) Receive a $3,000 rebate on the price of the car and finance the balance over 4 years at 4.75%

Option 2) Finance the vehicle for 5 years at 0% interest, but no rebate.

Which option would you suggest based on the total cost? How much would Mary save by selecting one option over another over the repayment period?

I HAVE THE CORRECT ANSWER GIVEN BY MY PROFEESOR. I ONLY NEED TO SEE THE WORK ON EXCEL TO UNDERSTAND IT.

THE CORRECT ANSWER IS : Savings by choosing Option 1 $1,231.63 Interest $1,768.37 For option 1 $0.00 option 2

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