Youre looking to buy a 2018 Ford Fusion Titanium with sunroof and leather seats at a price of $32,000. Being a poor college student, you have cash to pay taxes, title, license & fees but your parents offer to give you 10% of the price, $3200, as a down payment and you need to finance the remainder of $28,800. You smartly researched your finance options and got pre-approval at a 3.3% APR for 60 months on your own so youre not at the mercy at depending on financing from the car dealership. Ford is offering 0% APR financing or $2,750 cash back which would be used as an additional down payment that reduce that amount that you would need to finance. You would use your 3.3% APR pre-approved financing if you elect the $2750 cash back option. Answer the following questions.

1. What would be your monthly car loan payment under the Fords 0% APR financing offer (assume a 60-month loan term)?

2. What would be your monthly car loan payment under the Fords $2,750 cash back offer and your 3.3% APR pre-approved financing (assume a 60-month loan term)?

3. At what APR would you be indifferent between the two offers? In other words, at what APR would you have the same monthly payment (assuming a 60-month loan term) for the $2750 cash back offer as you would with the 0% APR financing offer?

4. Lets assume you go with the offer in question #2. Construct an amortization schedule for the loan for all 60 monthly payments. What is your loan balance after 36 months?

5. Now lets assume you were willing to make a monthly car loan payment of $550. Re-do your amortization schedule from question #4 with this monthly payment. How long will it take to pay off the loan with the $550 monthly payment?