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You can buy a car that is advertised for $20,160 on the following terms: (a) pay $20,160 and receive a $4,160 rebate from the manufacturer;
You can buy a car that is advertised for $20,160 on the following terms: (a) pay $20,160 and receive a $4,160 rebate from the manufacturer; (b) pay $420 a month for 4 years for total payments of $20,160, implying zero percent financing a. Calculate the present value of the payments for option (a) if the interest rate is 1.00% per month. Present value b. Calculate the present value of the payments for option (b) if the interest rate is 1.00% per month. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value c. Which is the better deal? Option a Optionb
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