A car dealer offers you two deals on a car that costs $16,000. Please calculate the monthly payment, given these two payment options the car dealer is offering.

Payment Option 1: You can finance the car for 60 months with no interest if you make a $3,000 down payment.

Payment Option 2: You can finance the car for 72 months (6 years) with 1% simple annual interest and no down payment. (Hint: To calculate simple annual interest, use the formula Interest = Principal * Rate * Time (in years). Add the amount of interest to the price of the car.)

Which monthly payment amount is lower? Please exp

Question

A car dealer offers you two deals on a car that costs $16,000. Please calculate the monthly payment, given these two payment options the car dealer is offering.

Payment Option 1: You can finance the car for 60 months with no interest if you make a $3,000 down payment.

Payment Option 2: You can finance the car for 72 months (6 years) with 1% simple annual interest and no down payment. (Hint: To calculate simple annual interest, use the formula Interest = Principal * Rate * Time (in years). Add the amount of interest to the price of the car.)

Which monthly payment amount is lower? Please exp

anonymous · Answer

The principal is the initial value of 16,000, the rate will be your interest, and if the interest compounds annually, it will compound once a year, so your time will be 6.

your equation for option one is 16,000, your principle, minus 3000, your inital payment, and then take the difference and divide by 60 for your monthly payment.

your equation for option 2 will be 16,000 * .01 * 6