After much consideration you have decided to purchase a boat. This is a luxury item for you so you need to make sure that you get the best deal that you can. You found the same boat at two different retailers. Marine Max has the boat you want for $29,909 and they will offer financing for 5 years at 5.25% APR. Lowe Boats has the same boat for $28,889 and they will offer financing for 6 years at 6.00% APR. a. Which option offers the lower monthly payment? b. Which option costs less over the course of the loan? c. How much will you pay for the boat if you chose the option that costs less overall?
After much consideration you have decided to purchase a boat. This is a luxury item for you so you need to make sure that you get the best deal that you can. You found the same boat at two different retailers. Marine Max has the boat you want for $29,909 and they will offer financing for 5 years at 5.25% APR. Lowe Boats has the same boat for $28,889 and they will offer financing for 6 years at 6.00% APR. a. Which option offers the lower monthly payment? b. Which option costs less over the course of the loan? c. How much will you pay for the boat if you chose the option that costs less overall?
a) 1- The monthly payments of Marine Max would be=$567.85 per month.
2- The monthly payments of Lowe Boats would be=$478.77 per month.
b) Marine Max overall cost will be: 60 x $567.85 =$34,071.00.
Lowe Boats overall cost will be: 72 x $478.77 =$34,471.44.
c) From b above, you can see Marine Max is slightly cheaper.
