# Suppose that you are buying a car for \$50,000, including taxes andlicense fees. You saved \$10,000 for a down payment. The dealer is offering13.you two incentives:Incentive A: \$5000 off the price of the car, followed by a 5-year loan at 7.33%Incentive B: No cash rebate. Free financing (no interest) over 5 years.(a) What is the monthly payment for Incentive A? (b) What is monthlypayment for Incentive B? (c) What is the difference in monthly paymentsbetween the two incentives? (d) Which incentive is the better deal foryou? (Round to the nearest dollar. For example, \$247)00

Question
Asked Oct 26, 2019
45 views
check_circle

star
star
star
star
star
1 Rating
Step 1

13.

a)

The monthly payment for incentive A is \$698 and it is obtained below:

From the given information, the total cost of the car is \$50,000 including taxes and license fees and the down payment is \$10,000.

The cost of the car=total cost of the car-down payment=50,000-10,000=40,000.

For Incentive A,

The dealer offering \$5000. Hence, the cost of the car is 40,000-5000=35,000. That is, P=\$35,000.

The rate is 7.33%. That is, r=0.0733.

The given time is 5 years. That is, t=5 years. And payment is done by monthly. That is, n=12.

Step 2

b)

The monthly payment for incentive B is \$583 and it is obtained below:

For Incentive B,

There is no cast debate. Hence,  P=\$35,000.

payment is done by monthly. That is, n=12.

The give...

### Want to see the full answer?

See Solution

#### Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in