Question

You are in the process of purchasing a new car that will cost you $25,000. The dealership is offering you either a $1,000 rebate (applied toward the purchase price, so that the purchase price becomes $24,000) if you pay today or 3.9% APR financing for 4 months and no rebate (with payments made at the end of the month).

You are in the process of purchasing a new car that will cost you $25,000. The dealership is offering you either a $1,000 rebate (applied toward the purchase price, so that the purchase price becomes $24,000) if you pay today or 3.9% APR financing for 4 months and no rebate (with payments made at the end of the month).

You have been pre-approved for an auto loan through your local credit union at an interest rate of 7.5% APR for 4 months – this would allow you to pay the dealership today and get the $1000 rebate.

Which option has the higher monthly payment - financing through your credit union at 7.5% APR and getting the $1000 rebate OR skipping the rebate and financing through the dealership at the lower 3.9% APR?

Answer #1

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**SOLVED WITH BA II PLUS
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at 0% APR, as indicated in a 2016 advertisement by a prominent car
dealership, offering zero percent financing or cash back deals on
some models.
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