Question: You are trying to decide whether to keep your current car or buy a new car. If you keep your current car you will pay

You are trying to decide whether to keep your current car or buy a new car. If you keep your current car you will pay $800 per month (starting next month) on average for maintenance, gas, property tax and insurance. You will make these payments for 10 years. Alternatively, you can buy a new car and pay $30,000 today and $300 per month (starting next month) on average for maintenance, gas, property tax and insurance. You will make these payments for for 10 years. If your investments earn 4% APR (compounded monthly), which alternative is cheaper in present value terms and by how much?

Group of answer choices

keep existing car saves $18,820

get new car, saves $20,871

keep existing car saves $20,354

get new car, saves $19,385

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