Question

1. We are considering purchasing a car. We can obtain financing (a loan) from the dealer or the bank. The term of either loan will be 5 years (with monthly payments).

   The dealer offers a loan with an annual nominal interest rate of 1.9% for the full cost of $24, 000 (including taxes, etc) or we may purchase the car at the discounted price of $21, 500 and finance through the bank at an interest rate of 4.5%.

   Which option should you choose?

Answer 1

Per your installapeal on Doolen loon - 24,50015 , 1,800 Per y car installed on financing e 21,500 15,4,300 1.lerust on Dealami long terest on financing 24,000x!.!456 24,500 74.5,767.5 100 19,200 71.9, 364. 617,200 Y 4C ,714 12,960x48-5805 T 14,460 x 1.9. 273.6 100 9,600 i 1.9, 182 4 u 8,600 r 45.SB7 100 4,300x 95 = 1935 14,800 y 19 591.2 100 1368 Total - 2902.5 Total Gst of Declen's loan 1. 24,000 + 1366 L'. 257,368 To fal Cost of financing = 21,500 +2902.5 - 24,402.5 Here financing will be soool option because it is cleaper than alabis looup.