Scott wants to purchase a Toyota Rav4 XLE. The model he wants is available for $26,789. Scott has saved $4,000 for a down payment, and the dealer has offered $3,500 for his tradein. He is considering three financing options.
Toyota’s financial department is offering 0% interest for three years.
Scott’s credit union is offering 1.98% compounded monthly for four years.
His bank is offering 2.97% compounded monthly for five years.
a) What would Scott’s monthly loan payment be for each option?
b) What total amount of interest would Scott pay for each option?
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