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You want to buy a new jeep that cost $24,000. You intend to pay $2400 down...

You want to buy a new jeep that cost $24,000. You intend to pay $2400 down payment and finance $21,600.
You are given two options. Option 1: finance through the local bank at 2.99% per year for 48 months,
compounded monthly. Option 2: finance through a credit union at 3.99% per year for 48 months and is a simple
interest loan. Which loan has the greater future value (greater cost to you)?
ANSWER: Option 1: F = $24,340.57, Option 2: F = $25,047.36

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Answer #1

Option 1: future value Option 2: future value $24,340.5.7 $25,047.36 I21,600 x 1+(0.0299/12)448 ] [ 21600t(21600*3.99%/12*48) ] Greater future value Option 2

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