Karim Soltan is shopping for a new vehicle, and has noticed that many vehicle manu-facturers are offering special deals to sell off the current year’s vehicles before the new models arrive. Karim’s local Ford dealership is advertising 3.9% financing for a full 48 months (i.e., 3.9% compounded monthly) or up to $4000 cash back on selected vehicles. The vehicle that Karim wants to purchase costs $24 600 including taxes, delivery, licence, and dealer preparation. This vehicle qualifies for $1800 cash back if Karim pays cash for the vehicle. Karim has a good credit rating and knows that he could arrange a vehicle loan at his bank for the full price of any vehicle he chooses. His other option is to take the dealer financing offered at 3.9% for 48 months. Karim wants to know which option requires the lower monthly payment. He knows he can use annuity formulas to calculate the monthly payment. Question Suppose Karim decides to explore the costs of financing a more expensive vehicle. The more expensive vehicle costs $34 900 in total and qualifies for the 3.9% dealer financing for 48 months or $2500 cash back. What is the highest effective annual rate of interest at which Karim should borrow from the bank instead of using the dealer’s 3.9% financing?
Unitary Method
The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.
Speed, Time, and Distance
Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 miles away.
Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
Karim Soltan is shopping for a new vehicle, and has noticed that many vehicle manu-
facturers are offering special deals to sell off the current year’s vehicles before the new models
arrive. Karim’s local Ford dealership is advertising 3.9% financing for a full 48 months (i.e.,
3.9% compounded monthly) or up to $4000 cash back on selected vehicles.
The vehicle that Karim wants to purchase costs $24 600 including taxes, delivery, licence,
and dealer preparation. This vehicle qualifies for $1800 cash back if Karim pays cash for the
vehicle. Karim has a good credit rating and knows that he could arrange a vehicle loan at his
bank for the full price of any vehicle he chooses. His other option is to take the dealer financing
offered at 3.9% for 48 months.
Karim wants to know which option requires the lower monthly payment. He knows he can
use annuity formulas to calculate the monthly payment.
Question
Suppose Karim decides to explore the costs of financing a more expensive vehicle. The
more expensive vehicle costs $34 900 in total and qualifies for the 3.9% dealer financing
for 48 months or $2500 cash back. What is the highest effective annual rate of interest at which Karim should borrow from the bank instead of using the dealer’s 3.9% financing?
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