Problem $6$: You are not quite sure about the car deal in Problem $5.$ So

the car salesman now tells you that the company is offering a bonus if

you buy the car today. You can either choose to get a $$2500$ discount

on the car price, or zero percent financing. Which option is the best

deal? Please compute the PMT for both options to find out.Problem $5$: You are buying a car. The one you have choosen to

purchase is going to cost you $$32,985.$ Your car salesman has told you

that you can purchase this vehicle for $$525$ per month for $72$ months.

What interest rate will you be paying?

Note: For a Loan the Price is listed as $PV$

Because the bank gives you the money in the beginning

FVis $0,$ because the loan will be paid off at the end

Problem $6$: You are not quite sure about the car deal in Problem $5.$ So

the car salesman now tells you that the company is offering a bonus if

you buy the car today. You can either choose to get a $$2500$ discount

on the car price, or zero percent financing. Which option is the best

deal? Please compute the PMT for both options to find out.

Remember, interest rates are ALWAYS stated as yeariy rates.

See "Compounding More Frequently" on the General Information Tab