Learning Goals: Demonstrate decision making and financial literacy skills used to make major consumer purchases, Understand how to shop and determine borrowing costs for large purchases. 1. Zara wants to buy a new Ford car. She sees the following ad Sales Price Down Payment Cash Rebate PV N 1 FV Your Texas Ford Dealers Greater fond.com a. She has negotiated a sales price of $24,145 and she has a $4,000 down payment. She is eligible for the full $750 cash rebate. Her bank has pre-approved her for a 48 month car loan at 3.50% Assuming Zara wants the cheapest overall price, which option should she take? Should she take the 19% financing offer for 66 months from the dealer, or should she borrow the money from her bank at 3:50% to pay off the dealer and receive the $750 cash rebate? PMT Total Payment Total Cost 2016 Ford Mustang Sales Price Dawn Daument 1.9% APR for 66 mos. Ford Credit Finanding Yond Bank Option Dealer Option $750 Cash Back b. Now suppose she is only able to get $250 cash back (with the 3.50% financing from her bank). Does this change her decision? Bank Option Dealer Option Selection Explanation: Selection Explanation