A car company is offering financing plan to its customers for a limited period of time. The offer is good for 1 year and available only for citizens and residents with stable monthly income. The offer...

A car company is offering financing plan to its customers for a limited period of time. The offer is good for 1 year and available only for citizens and residents with stable monthly income. The offer is part of the company’s anniversary sale promotion campaign. The following were offered to you;

1. Toyota car model 2019 cash price OMR 7,000; down payment OMR 500 and the balance will be paid with 24 equal monthly payments of OMR 280.

2. Toyota car model 2019 cash price OMR 7,000 down payment OMR 1,000 and the balance will be paid with 24 equal monthly payments of OMR 260.

3. Borrow OMR 7,000 from the bank at 2% simple interest for 2 years. The money borrowed will be used to buy the car for cash.

A) Compare the finance charges of the three options. Which do you think is the best option for the customer?

B) Discuss behavioral and non-financial factors you consider when deciding the alternative financing plan. Explain your answer.