The following four different financing schemes have been offered to you for the purchase of a $30,000 car.Which one should you choose?
A)$5,000 down with the balance paid in equal monthly payments of $624.70 per month for 48 months
B)$0 down with equal monthly payments of $960 per month for 36 months
C)$15,000 down and a final payment of $18,550 two years from now
D)have it financed with a bank loan at a quoted rate of 9.75% with loan repayments made monthly

Question

Quizplus · Accepted Answer

Option A has a lower overall cost of financing compared to the other options. The total cost of financing for option A is $34,988.80, while option B is $34,560 and option C is $33,050. Option D does not provide enough information to calculate the total cost of financing. Additionally, option A has a manageable monthly payment of $624.70, while option B's monthly payment of $960 is quite high. Option C requires a large down payment and a large final payment in two years, which may not be feasible for everyone. Therefore, option A is the best choice.

The Following Four Different Financing Schemes Have Been Offered to You