You are negotiating about financing with a car dealer for the $24,000 vehicle you have decided to acquire. He offers you either a loan or a lease, and they both happen to be for 6 years with a monthly payment of $400.00. (a) What is the interest rate on the car loan? (b) What is the interest rate on the lease? (c) Which deal is preferable? You want to purchase an $18,000 car. You have two financing options: (1) 0% financing for 5 years; (2) $3,000 cash back and 7.5% financing for 6 years. How much less do you pay per month with the preferred alternative? You need to borrow $300,000 to buy a house. The going rate for 30-year mortgage is 575%. Your bank offers a lower rate of 5.35% if you pay 2 points. Should you take their offer? Calculate the NPV of paying the points. In this week's Powerball lottery, the lucky winner walked away with a $294 million prize, to be paid in 26 yearly installments of $11.3 million. The first installment will be paid immediately, of course. She was given the alternative of taking a lump sum of $168 million. (a) What discount rate was used to calculate the lump sum? (b) If the relevant discount rate (market rate) had been 9.5% instead, what would the lump sum have been