The university spirit organization needs to buy a car to travel to football games. A dealership in Lockhart has agreed to the following terms: $4,000 down plus 20 monthly payments of $750. A dealership in Leander will agree to a $1,000 down payment plus 20 monthly payments of $850. The local bank is currently charging an annual interest rate of 12% for car loans. Which is the better deal, and why?

Are you having trouble answering the question “The university spirit organization needs to buy a car to travel to football games. A dealership in Lockhart has agreed to the following terms: $4,000 down plus 20 monthly payments of $750. A dealership in Leander will agree to a $1,000 down payment plus 20 monthly payments of $850. The local bank is currently charging an annual interest rate of 12% for car loans. Which is the better deal, and why?”? If that’s the case, you don’t need to worry anymore. Azanswer has brought you the correct answer to your question.

The university spirit organization needs to buy a car to travel to football games. A dealership in Lockhart has agreed to the following terms: $4,000 down plus 20 monthly payments of $750. A dealership in Leander will agree to a $1,000 down payment plus 20 monthly payments of $850. The local bank is currently charging an annual interest rate of 12% for car loans. Which is the better deal, and why?

a. The Leander offer is better because the total payments of $18,000 are less than the total payments of $19,000 to be made to the Lockhart dealership.
b. The Lockhart offer is better because the cost in terms of present value is less than the present value cost of the Leander offer.
c. The Lockhart offer is better because the monthly payments are less.
d. The Leander offer is better because the cash down payment is less.
e. The Leander offer is better because the cost in terms of present value is less than the present value cost of the Lockhart offer.

Answer: E

We hope you have got the correct answer to your question “The university spirit organization needs to buy a car to travel to football games. A dealership in Lockhart has agreed to the following terms: $4,000 down plus 20 monthly payments of $750. A dealership in Leander will agree to a $1,000 down payment plus 20 monthly payments of $850. The local bank is currently charging an annual interest rate of 12% for car loans. Which is the better deal, and why?”, which was part of Accounting MCQs & Answers. Thanks for choosing us.

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