Answer:
By comparing both the payments we can say that Dealer A is cheaper by $4.50.
Step-by-step explanation:
Dealership A: The car costs $30,000, and the loan has an annual interest rate of 4.8% for 5 years.
The EMI formula is :
[tex]\frac{p\times r\times(1+r)^{n} }{(1+r)^{n}-1 }[/tex]
Now, p = 30000
r = [tex]4.8/12/100=0.004[/tex]
n = [tex]5\times12=60[/tex]
Putting values in formula we get;
[tex]\frac{30000\times0.004\times(1+0.004)^{60} }{(1+0.004)^{60}-1 }[/tex]
=> [tex]\frac{30000\times0.004\times(1.004)^{60} }{(1.004)^{60}-1 }[/tex]
EMI is = $563.34
Dealership B: The car costs $29,800, and the loan has an annual interest rate of 5.4% for 5 years.
p = 29800
r = [tex]5.4/12/100=0.0045[/tex]
n = [tex]5\times12=60[/tex]
Putting values in formula we get;
[tex]\frac{29800\times0.0045\times(1+0.0045)^{60} }{(1+0.0045)^{60}-1 }[/tex]
=> [tex]\frac{29800\times0.0045\times(1.0045)^{60} }{(1.0045)^{60}-1 }[/tex]
EMI = $567.84
By comparing both the payments we can say that Dealer A is cheaper by $4.50.
