Ford Motor Company's current incentives include 4.8 percent APR financing for 84 months or $ 900 cash back on a Mustang. Let's assume Suzie Student wants to buy the premium Mustang convertible, which costs $ 30 comma 000, and she has no down payment other than the cash back from Ford. If she chooses the $900 cash back, Suzie can borrow from the VTech Credit Union at 6.8 percent APR for 84 months (Suzie's credit isn't as good as Prof. Finance). What will Suzie Student's monthly payment be under each option? Which option should she choose? a. If Suzie chooses 4.8 percent APR financing for 84 months to buy the premium Mustang convertible, which costs $ 30 comma 000 equals PMT left parenthesis 71.224446 right parenthesis, what will her monthly payment be? $ nothing (Round to the nearest cent.)
a]
If Suzie chooses 4.8 percent APR financing for 84 months, monthly payment is calculated using PMT function in Excel :
rate = 4.8% / 12
nper = 84
pv = 30,000 (no cash back as the financing option with Ford is chosen)
PMT is calculated to be $421.20
b]
If Suzie chooses 6.8 percent APR financing for 84 months, monthly payment is calculated using PMT function in Excel :
rate = 6.8% / 12
nper = 84
pv = 29,100 (amount of loan = price - cash back = $30,000 - $900)
PMT is calculated to be $436.36
Ford Motor Company's current incentives include 4.8 percent APR financing for 84 months or $ 900...
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