Use the cash-back offer as down payment

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Reference no: EM131935597

A car manufacturing company offered a choice of a 0% loan for 60 months, or $5000 cash back on the purchase of a $29,061 car.

a) If someone took the 0% loan offer, how much will the monthly payment be?

b) If someone took the $5000 cash-back offer and can borrow money from their local bank at 6% interest compounded monthly for 5 years, how much will the monthly payment be? (Assume you use the cash-back offer as a down payment on the car)

c) Which of the 2 offers is more favorable?

Reference no: EM131935597

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