You want to buy a pickup truck. You are trying to decide between the following...
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You want to buy a pickup truck. You are trying to decide between the following deals. You called the bank and they told you they would loan you the money at a 7% interest rate. Which is the best deal?
Deal #1. The cost is 30,000 with 3,000 down and the rest in three equal annual payments which include interest at 4%.
Deal #2. $32,000 payable in 2 years. No annual payment!
Deal #3. Cost $35,000 with the following terms. $5,000 down and interest only payments of 3% per year for 5 years. At the end of the five years, you pay the $30,000.
Deal #4. $27,000 cash
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