Question

Sylvia wants to purchase a 2017 Dodge Challenger for a negotiated price of $38,770 inclusive of all costs (options, taxes, delivery charges, etc.). Sylvia will be making a down payment of $8,000. She has a choice between taking a $2500 cash rebate (and arranging her own financing at 4.98% for 36 months) OR selecting the dealer incentive financing of 0.9% APR for 36 months. What is the total cost of this car if Sylvia chooses the cash rebate option

Answer 1

$38,492.84

Step-by-step explanation:

Calculation to determine what is the total cost of this car if Sylvia chooses the cash rebate option

CASH REBATE:

First step is to determine the PMT using Financial calculator

N= 36

I/Y= 4.98/12= .415%

PV= 30770 - 2500 = 28270

PMT= ??

FV= 0

Hence,

PMT= 847.0234

Now let determine the total cost

Total cost=($847.0234*36)+$8,000

Total cost=$30,492.84+$8,000

Total cost =$38,492.84

Therefore the total cost of this car if Sylvia chooses the cash rebate option is $38,492.84