(Annuity payments) Ford Motor Company's current incentives include 3.9 percent APR financing for 96 months...
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(Annuity payments) Ford Motor Company's current incentives include 3.9 percent APR financing for 96 months or $900 cash back on a Mustang. Let's assume Suzie Student wants to buy the premium Mustang convertible, which costs $20,000, and she has no down payment other than the cash back from Ford. If she chooses the $900 cash back, Suzie can borrow from the VTech Credit Union at 5.9 percent APR for 96 months (Suzie's credit isn't as good as Prof. Finance). What will Suzie Student's monthly payment be under each option? Which option should she choose? a. If Suzie chooses 3.9 percent APR financing for 96 months to buy the premium Mustang convertible, which costs $20,000 = PMT(82.353251), what will her monthly payment be? $ (Round to the nearest cent.) b. If Suzie chooses $900 cash back to buy the premium Mustang convertible and borrows $19,100 from the VTech Credit Union at 5.9 percent APR for 96 months, how much will her monthly payment be? $ (Round to the nearest cent.) c. Which option should Suzie Student choose? (Select the best choice below.) O A. Choose cash back financing because the monthly payment under this option is lower. O B. Choose low interest rate financing because the monthly payment under this option is lower
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