Autumn 2011 Managerial Finance Prof. Francisco Pérez-González Should You Pay Cash for a New Car? Read and prepare: Should you pay cash for a new car? (course reader) Big picture question: Should Professor Keppel pay cash for his new car? Questions: 1. What is the monthly payment Mr. Keppel will need to make on his car loan? 2. What is the “total interest paid” on the loan? Is the 2,607 number correct? 3. How much interest will he earn on his savings? 4. What is Sperling’s Rule? 5. What is the right decision?
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