1. You plan to buy a Honda car which currently costs $22,000. The car dealer offers the following two options: you can either borrow the entire amount at low interest rate of 1.99% per year compounded monthly for 36 months or get a cash rebate of $1,200 and borrow at 4.99% per year compounded monthly for 36 months. Which option is better for you?
Lower interest rate since monthly payment is $623
Lower interest rate since monthly payment is $630
Cash rebate rate since monthly payment is $623
Cash rebate rate since monthly payment is $635
2. You charged $1,000 on your credit card for Christmas presents. Your credit card company charges you 18.99% annual interest, compounded monthly. If you make the minimum payments of $30 per month, how long will it take ( to the nearest month) to pay off your balance?
a. 27 months
b. 64 months
c. 48 months
d. 54 months