Problem:
You want to purchase a new car. The price of the car is $24,035. The dealer is currently offering a special promotion: You can choose a $1500 rebate up front or 0% financing for the first 36 months and 6% financing for the remaining 24 months of your loan.
Required:
Question: Which is the better deal, the $1500 rebate or the 0% financing for the first three years followed by 6% financing for the last two years of the loan? Justify your answer by computing your monthly payments over 60 months under each of the two options.
Note: Please provide full description.