You’re looking to buy a 2018 Ford Fusion Titanium with sunroof and leather seats at a price of $32,000. Being a poor college student, you have cash to pay taxes, title, license & fees but your parents offer to give you 10% of the price, $3200, as a down payment and you need to finance the remainder of $28,800. You smartly researched your finance options and got pre-approval at a 3.3% APR for 60 months on your own so you’re not at the mercy at depending on financing from the car dealership. Ford is offering 0% APR financing or $2,750 cash back which would be used as an additional down payment that reduce that amount that you would need to finance. You would use your 3.3% APR pre-approved financing if you elect the $2750 cash back option. Answer the following questions.
1. What would be your monthly car loan payment under the Ford’s 0% APR financing offer (assume a 60-month loan term)?
2. What would be your monthly car loan payment under the Ford’s $2,750 cash back offer and your 3.3% APR pre-approved financing (assume a 60-month loan term)?