2. Rebate Versus Low Interest Rate. Kyle Parker of Fayetteville, Arkansas, has been shopping for a new
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2. Rebate Versus Low Interest Rate. Kyle Parker of Fayetteville, Arkansas, has been shopping for a new car for several weeks. So far, he has negotiated a price of $27,000 on a model that carries a choice of a $2500 rebate or dealer fi nancing at 2 percent APR. The dealer loan would require a $1000 down payment and a monthly payment of $564 for 48 months. Kyle has also arranged for a loan from his bank with a 7 percent APR. Use the Decision-Making Worksheet on page 224 to advise Kyle about whether he should use the dealer fi nancing or take the rebate and use the fi nancing from the bank.
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