You are looking at the car that is currently selling at $55,000. Classic Autos is offering free credit (i.e. no interest charged on the borrowed amount) on the car. You pay $10,000 down today and then pay the remaining balance at the end of five years. Premium Motors next door does not offer credit, but will give you $15,000 off the list price if you pay cash now. Which dealership is offering a better deal? Assume annual compounding with 8% discount rate.
A. Cannot determine without further info
B. Classic autos is offering a better deal
C. Premium autos is offering a better deal
D. Both dealerships' offer value are same
