"Zero percent financing" means the obvious thing-that no interest is being charged on the loan....
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"Zero percent financing" means the obvious thing-that no interest is being charged on the loan. So if we borrow $1200 at 0% interest and pay it off over 12 months, our monthly payment will be $1200/12 = $100. Suppose you are buying a new truck at a price of $30,000. You plan to finance your purchase with a loan you will repay over two years. The dealer offers two options: either dealer financing with 0% interest, or a $3000 rebate on the purchase price. If you take the rebate, you will have to go to the local bank for a loan (of $27,000) at an APR of 6.5%. What would your monthly payment be if you took the rebate? (Round your answer to the nearest cent.) $ What would your monthly payment be if you used dealer financing? (Round your answer to the nearest cent.) $ Should you take the dealer financing or the rebate? (Assume you take the deal that saves you the most money.) O dealer financing O rebate How much would you save over the life of the loan by taking the option you chose? (Round your answer to the nearest cent.) $
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