I am willing to sell you my $2005$ Honda Civic LX$.$ It's a real sweet ride with cracked windshield and a missing hub cap. Because it is so old you will not be able to get an auto loan. So$,$ I am willing to sell you the car for $36$ monthly payments of $$200$ that you will make directly to me$.$ No math or anything, let's just call it a $0\%$ loan with a manageable monthly payment. Or$,$ I will take $$6,000$ cash today. Since you do not have the cash you will need to get a personal loan. ICCU is willing to give you a personal loan for $36$ months at $10\mathrm{.}99\%$ APR. Which of these is the better deal?

 

If you make payments of $$200$ directly to me is it really a $0\%$ interest loan? Given the information, what is the real annual rate of interest you would be paying to me if you agreed to make $36$ monthly payments of $$200?$