You just decided to purchase a new BMW for $50,000.Your bank has offered to finance your entire purchase with a four year loan at the current 3% interest rate.You would make one payment at the end of each year for four years.

a.What would be your annual payments? ____

b.However, the BMW dealership has offered you two other alternatives.They will finance the car at 0% interest for four years with four equal payments at the end of each year or they will give you $4,000 off the price of the car and you can finance it through the bank.Clearly, the 0% interest is better than the bank loan.However, how much would you save or lose by taking the $4,000 off the price of the car and financing through the bank?