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

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Asked Oct 26, 2019
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Suppose that you are buying a car for $50,000, including taxes and
license fees. You saved $10,000 for a down payment. The dealer is offering
13.
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 monthly
payment for Incentive B? (c) What is the difference in monthly payments
between the two incentives? (d) Which incentive is the better deal for
you? (Round to the nearest dollar. For example, $247)
00
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Suppose that you are buying a car for $50,000, including taxes and license fees. You saved $10,000 for a down payment. The dealer is offering 13. 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 monthly payment for Incentive B? (c) What is the difference in monthly payments between the two incentives? (d) Which incentive is the better deal for you? (Round to the nearest dollar. For example, $247) 00

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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.

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P Monthly payment -nt 1-1+ п 0.0733 35000 12 -12x5 0.0733 1-1+ 12 213.7917 0.3061 =698.4373 $698

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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...

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