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You're buying a car that costs $11,000. Dealer offers you two payment options. You can pay the dealer cash and get a $1,300 discount, thus

You're buying a car that costs $11,000. Dealer offers you two payment options. You can

pay the dealer cash and get a $1,300 discount, thus paying only $9,700. You can pay $5,000

now and pay $2,000 in each of the next 3 years. The dealer calls this his "zero-interest car

loan" plan. What is the EAR of the dealer's offer?

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