Interest Rate Method Problems
Question 1. You are in the process of purchasing a new automobile that will cost you $27,500. The dealership is offering you either a $2,500 rebate (applied toward the purchase price) or financing at a 1.9% APR for 48 months (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 6.5% APR for 48 months. If you take the $2,500 rebate and finance your new car through your credit union calculate your monthly payments.
Question 2. Calculate the monthly payments if you forgo the $2,500 rebate and finance your new car through the dealership.