Calculating total purchase price

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Reference no: EM1364960

Suppose that you want to purchase a new truck from a local dealership. The dealership is offering 2.0% financing for 4 years (term= 48 months). They are also offering a $3,000 cash rebate (subtracted from the purchase price) for an externally financed deal. You are able to secure a note from your local bank for the same 4 year term at 3.95% interest up to a maximum purchase amount of $50,000.

At what total purchase price will you have the same monthly payment between these two offers?

Under what circumstances would you choose one over the other?

Reference no: EM1364960

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