You are considering buying a flying car with a MSRP $($manufacturer$$s suggested retail price$)$ of $$600,000.$ The car dealer has offered you TWO alternatives for purchasing the car: You can buy the car for $$540,000$ in cash and get a $$60,000$ discount OR$,$ you can buy the car for $$600,000$ with a down payment of $$280,000.$

The balance can be paid with a zero interest loan to be paid back in $36$ equal monthly installments.

Your bank is willing to give you a $3$ year$-$loan $($that will require monthly payments$)$ at an annual rate of $12\%$ to fund option a$.$ Decide which option you should choose to finance the car.

The assumption is that you have $$280,000$ cash and any additional money would need to be borrowed or financed. In your work, calculate what the effective borrowing rate is when you finance with the dealer.

Be sure you figure out both options and calculate the effective annual rate of borrowing or EAR.