**break down each variable**

Assume that you've been shopping for a new car and intend to finance part of it through an installment loan. The car you're looking for has a sticker price of $14,000. The local dealership has offered to sell it to you for $2,000 down and finance the balance with a loan that will require 48 monthly payments of $321.93; Adventure Vehicles will sell you the exact same vehicle for $1,500 down plus a 60-month loan for the balance, with monthly payments of $297.37. Which of these two finance packages is the better deal?

Sara needs to borrow $4,500. First State Bank will lend her the money for 12 months through a single-payment loan at 13 percent, discount; Home Savings and Loan will make her a $4,500, single-payment, 12-month loan at 16 percent, simple interest. From where should Sara borrow the money?