Suppose you will need to buy a $16,000 car in 3 years. You could start...
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Suppose you will need to buy a $16,000 car in 3 years. You could start saving now so that you can pay cash for the car. Alternatively, you can just wait until you need the car and take out a 3-year loan. If we assume that the APR is 4% with either option, how much money will you save altogether by beginning to save now for a cash purchase versus waiting and taking out the loan? To answer this question, you'll need skills from both the Savings and Borrowing lessons. If your goal is to have $16,000 in the bank 3 years from now, what amount do you need to deposit each month? Recall that the APR if 4%. Round your answer the nearest cent. $ How much of your own money will you have invested altogether when the 3 years of saving is over? $ If you wait and borrow $16,000 for a 3 year period with an APR of 4%, what will your monthly payment be? Round your answer the nearest cent. $ How much money will you have to pay altogether to pay off the loan over 3 years? $ How much will you save altogether if you start saving now instead of taking out the loan? $
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