Question

You need a new car and the dealer has offered you a price of $ 20 comma 000​, with the following payment​ options: (a) pay cash and receive a $ 2 comma 000 ​rebate, or​ (b) pay a $ 5 comma 000 down payment and finance the rest with a 0 % APR loan over 30 months. But having just quit your job and started an MBA​ program, you are in debt and you expect to be in debt for at least the next 2​ ½ years. You plan to use credit cards to pay your​ expenses; luckily you have one with a low​ (fixed) rate of 12.03 % APR. Which payment option is best for​ you?

Answer 1

Answer:

(b) pay a $ 5 comma 000 down payment and finance the rest with a 0 % APR loan over 30 months.

Explanation:

In this case this is the best option to keep the lowest interests in your wallet, having to pay the whole thing for $18,000 that would start to generate interests in the credit card as for the day one, oaying just $5,000 and having the opportunity to finance the rest is the one that would let you generate the less interests in your credit card.