You want to buy a new car that costs $48,000. Dealer A offers to lend the entire $48,000 for a zero interest 2-year loan with monthly payments that start next month. Dealer B requires you to pay $10,000 now, followed by installments of $1,500 for the next 24 months. You observe that the market interest rate is 6%.

a) What is the net cost today of the two options? Which option offers you the cheapest financing?

b) Use a financial calculator or spreadsheet to help calculate what the interest rate would be if the financing cost from dealer A was equall to that of Dealer B.