A car dealer offers you two deals on a car that costs $14,000. 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 $2,000 down payment.

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

Which monthly payment amount is lower?

Question

A car dealer offers you two deals on a car that costs $14,000. 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 $2,000 down payment.

Payment Option 2: You can finance the car for 72 months (6 years) with 2% simple annual interest and no down payment. (Hint: To calculate simple annual interest, use the formula Interest = Principal * Rate * Time. Add the amount of interest to the price of the car.)

Which monthly payment amount is lower?

anonymous · Answer

1. (14000 -2000)/60 =
2. 14000*.02*6 is simple interest - get your total
then, (14000 + interest)/72 =

once you find the two payments you can see which is lower

post and let me see your calculations

anonymous · Answer

wait so whats the answer ?

anonymous · Answer

did yoou calculate the solution to 1 above? interest? and then 2 above?

i thought you were asking to get explanations

anonymous · Answer

1. 200
int= 1680
2. 217.78

so lower is option 1