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You want to buy a new car that costs RM48,000. Dealer A offers to lend you the entire RM48,000 for a zero-interest 3-year loan with

You want to buy a new car that costs RM48,000. Dealer A offers to lend you the entire RM48,000 for a zero-interest 3-year loan with monthly payments that start the next month. Dealer B requires you to pay RM10,000 now, followed by instalments of RM1,500 for the next 24 months. You observe that the market interest rate is 6%.

(a) Calculate the net cost today of the two options.

(b) Which option will you choose to finance the car.

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