Your have made a decision to purchase a new Durango. The following add downloaded recently off the web reveals your two financing options at the dealership. The purchase price is $33, 095.
If you decide to take the rebate (cash allowance), your local bank has agreed to finance the balance for 60 months at an annual rate of 5.5%
(A) Which of these two alternatives is a better financing deal?
(B) What would the cash allowance need to be in order to make these two options equal?