Question
Suppose you are buying a new truck at a price of $20,000. You plan to finance your purchase with a loan you will repay over
Suppose you are buying a new truck at a price of $20,000. You plan to finance your purchase with a loan you will repay over two years. The dealer offers two options: either dealer financing with 0% interest, or a $2000 rebate on the purchase price. If you take the rebate, you will have to go to the local bank for a loan (of $18,000) at an APR (Annual Percentage Rate) of 6.5%. The amount you save over the life of the loan by taking the rebate option is $______. (Assume payments are made monthly and give your answer rounded to two decimal places.)
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