Barbara is going to purchase a car for $20,000. She has two financing options: She can finance the..

Barbara is going to purchase a car for $20,000. She has two
financing options: She can finance the purchase through the dealer at 1% for 48
months, with monthly loan payments of $425, or she can take a $2,000 rebate on
the purchase price and finance the remaining $18,000 with a 7.5% home equity
loan whose monthly payment will be $435. The interest on the home equity loan
is deductible; the interest on the dealer loan is not. Barbara is in the 33%
marginal tax rate bracket. Determine her best course of action in financing the
purchase of the car.