Problem $5-29$ Annuities $($LO$3)$

You can buy a car that is advertised for $$26,880$ on the following terms: $($a$)$ pay $$26,880$ and receive a $$4,880$ rebate from the

manufacturer; $($b$)$ pay $$560$ a month for $4$ years fcr total payments of $$26,880,$ implying zero percent financing.

a$.$ Calculate the present value of the payments for option $($a$)$ if the interest rate is $1\mathrm{.}00\%$ per month.

Present value

b$.$ Calculate the present value of the payments for option $($b$)$ if the interest rate is $1\mathrm{.}00\%$ per month.

Note: Do not round intermediate calculations. Round your answer to $2$ decimal places.

Present value

c$.$ Which is the better deal?

Option a

Option b