Question
When interest rates are low, some automobile dealers offer loans at 0% APR, as indicated in a 2021 advertisement by a prominent car dealership, offering
When interest rates are low, some automobile dealers offer loans at 0% APR, as indicated in a 2021 advertisement by a prominent car dealership, offering zero percent financing or cash back deals on some models. Eero percent financing means the obvious thing - that no interest is being charged on the loan. So if we borrow $1200 at 0% interest and pay it off over 12 months, our monthly payment will be ($1200)/(12)=$100. Suppose you are buying a new truck at a price of $20,000. You plan to finance your purchase with a loan that you will repay over two years. The dealer offers two options: either dealer financing with 0% interest, or a $2000
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