Question: Kindly answer the Finance question below, showing all work. Your neighbor is buying a new Tesla electric car. He has the following options to finance

Kindly answer the Finance question below, showing all work.

Your neighbor is buying a new Tesla electric car. He has the following options to finance the purchase:

I. Pays $70,000 today (in time 0)

II. Buy under a "no payments for three years" program by agreeing to pay $85,000 three years from today (in time 3)

III. Make 36 monthly payments over 3 years of $2,200 payable at the end of each month

(a) If the interest rate is 6% annually, calculate the present value of each option.

(b) At what interest rate do Option II and Option III have the same present value?

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