Offer instead of borrowing from his bank

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Mike plans to buy a $20,000 new car and borrow this $20,000 from his bank. He needs to pay back in 60 equal monthly payments over 5 years. The annual interest rate his bank offered is 6% compounded monthly. (a) What would be Mike's monthly payment? (b) If the dealer offered him a deal that includes $2,000 down payment and monthly payment of $360 for 60 months, should Mike take this offer instead of borrowing from his bank?

Reference no: EM131298311

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