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18 January, 10:36

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?

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  1. 18 January, 13:04
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    (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.
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