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

jim766 · Answer

payment option 1      ($14,000 - $2000)/ 60 = monthly payment

can you figure it out?

jim766 · Answer

payment 2      (14,000( .02)(6)  + 14,0000)    / 72

                       can you figure that out?

which one is lower?