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Suppose that you are buying a car for $60,000. You saved $20,000 for a down payment. The dealer is offering you two incentives: Incentive

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Suppose that you are buying a car for $60,000. You saved $20,000 for a down payment. The dealer is offering you two incentives: Incentive A is a $5000 off the price of the car, followed by a five-year loan at 7.39% compounded monthly. Incentive B does not have a cash rebate, but provides free financing (no interest) over five years. What is the difference between the monthly payments for the two offers? Which incentive is the better deal? Payment approximately $33; Incentive B is the better deal. approximately $15; Incentive A is the better deal. approximately $85; Incentive B is the better deal. approximately $67; Incentive A is the better deal.

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