You have decided to purchase a new car; the purchase price is $30,000. This balance can be financed by an auto dealer at 2.9% APR with payments over 48 months. Alternatively, you can get a $ 2000 discount on the purchase price if you finance the loan balance at an APR of 8.9% over 48 months. Should you accept the 2.9% financing plan or accept the dealers offer of a $2,000 rebate with 8.9% financing? Both APRs are compounded monthly. Your goal is minimizing your monthly payment.

A.

I will choose the 2.9% without discount

B.

I will choose 8.9% with discount