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You are about to purchase a car. The price of the car is $20,000. The dealer offers you two options. Under option 1. you get

You are about to purchase a car. The price of the car is $20,000. The dealer offers you two options. Under option 1. you get a rebate of $2.000, so you pay $18,000 now. Under option 2, you do not get the rebate, but you have a one-year grace period, so you pay $20,000 next year. Assume that the interest rate is 10%. 



What option would you choose? Assume that you have enough money to pay now?

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