When interest rates are low, some automobile dealers offer loans at 0% APR, as indicated in a 2016 advertisement by a prominent car dealership, offering 0 % financing or cadh back deals on some models.

0% financing means the obvious thing--that no interest is being charged on the loan. So if we borrow $1,200 at 0% interest and pay it off over 12 months, our monthly payment will be $1,200/12=$100.

Suppose you are buying a new truck at the 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 $2,000 rebate on the purchasing price. If you take the rebate, you will have to go to the local bank for a loan (of $18,000) at an APR of 6.5%.

Should you take the dealer financing or the rebate? (Assyme you take the deal that saves the most money)

A. Dealer financing

B. Rebate

How much would you save over the life of the loan by taking the option you chose? (Round to the nearest cent)