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How to finance the car bank loan or zero interest loan

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Reference no: EM132591948

You are considering buying a new top of the line luxury car. The car's list price is $99,000. The dealer has offered you two alternatives for purchasing the car:

  • You can buy the car for $90,000 and get a $9,000 discount in the bargain.
  • You can buy the car for the list price of $99,000. In this case, the dealer is willing to take $39,000 as an initial payment. The remainder of $60,000 is a "zero interest loan" to be paid back in equal installments over 36 months.

Alternatively, your local bank is willing to give you a car loan at an annual interest rate of 10% compounded monthly (that is 10%/12 per month).

Question 1: Decide how to finance the car Bank loan or zero interest loan with the dealer, or cash payment.

Reference no: EM132591948

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