Ford Motor’s Company’s current incentives include 3.1 percent APR financing for 48 months or $1,400 cash back on a Mustang. Letâ€™s assume Suzie Student wants to buy a premium Mustang convertible, which costs $22,000 and she has no down payment other than the cash back from Ford. If she chooses the $1,400 cash back, Suzie can borrow from the VTech Credit Union at 5.1 percent APR for 48 months. (to the nearest cent)
1. If Suzie chooses 3.1 percent APR financing for 48 months to buy the premium Mustang convertible, which costs $22,000 = PMT (45.088608) what will be her monthly payment?
2. If Suzie chooses $1,400 cash back to buy the premium Mustang Convertible and borrows $20,600 from the VTech Credit Union at 5.1% APR for 48 months, how much will her monthly payment be?