Zero percent financing means the obvious thingthat no interest is being charged on the loan. So if we borrow $1,200 at 0% interest and pay it off over 12 months,our monthly payment will be $1,200/12 = $100.

Suppose you are buying a new truck at a price of $30,000. You plan to finance your purchase with a loan you will repay over two years. The dealer offers two options: either dealer financing with 0% interest, or a $3,000 rebate on the purchase price. If you take the rebate, you will have to go to the local bank for a loan (of $27,000) at an APR of 6.5%.

How much would you save over the life of the loan by taking the option you chose? (Round your answer to the nearest cent.)