Julia is buying a $30,000 car. The dealer offers her two alternatives. [Choice 1] Pay the full $30,000 purchase price and finance it with a loan at...

Julia is buying a $30,000 car. The dealer offers her two alternatives.

[Choice 1] Pay the full $30,000 purchase price and finance it with a loan at 5% annually over 4 years.

[Choice 2] Receive $2,000 cash back and finance the rest at a bank annual interest rate of 9%.

Both loans have monthly payments over four years. Which should Julia choose?

Choice 1

Choice 2