Question
Downward Motors has offered Vicki either a $2,500 rebate (Option A) or a 2%, 4-year loan (Option B) on the new SUV she is purchasing
Downward Motors has offered Vicki either a $2,500 rebate (Option A) or a 2%, 4-year loan (Option B) on the new SUV she is purchasing for $33,000 with a $3,000 down payment. Vicki has done her homework and knows that she can get a 6%, 4-year loan at her credit union. Answer the following questions by filling the integers in the blanks, rounding to the nearest integers and without thousand separators.
Analysis: If Vicki takes Option B (the 2% and 4-year loan) from the dealer, her monthly payments will be $ .
If the monthly payments are the number you filled above and under Vickis credit condition given by her credit union (6% on a 4-year loan), the present value (PV) of these future payments on Option B is $ .
If, in the very beginning, Vicki takes Option A (the $2,500 rebate), the present payments of buying the SUV are $ .
So, Vicki should take Option from the dealer. (fill either A or B in this blank)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started