You just decided to purchase a new Corvette for $60,000.The bank has offered to finance your entire purchase with a four year loan at 5% interest.You would make one payment at the end of each year for four years.

a.What would be your annual payments? __________________

b.However, the GM 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 $6,500 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 $6,500 off the price of the car and financing through the bank?

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