A graphic designer needs a laptop for audio/video editing, and noticesthat they can elect to pay $3,500 for a Dell XPS laptop, or lease from themanufacturer for monthly payments of $96 each for four years. Thedesigner can borrow at an interest rate of 10% APR compoundedmonthly. What is the cost of leasing the laptop over buying it outright?O A. Leasing costs $570 more than buying.B. Leasing costs $228 more than buying.OC. Leasing costs $342 more than buying.OD. Leasing costs $285 more than buying.

First we need to calculate present value of lease payments by using equation below. Where PMT=…

Answered: A graphic designer needs a laptop for…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Please solve using Excel and show formulas. You have decided to buy a car with price tag of $60,000 but you are able to negotiate the price down to $58,000. You have $5,000 saved, so you need to borrow $53,000 in a 5-year loan from your bank (your bank offers lower rates than the auto-dealer) at a 4.5% APR (annual rate). How much will you owe to the bank after 3 years?
← You need a loan of $150,000 to buy a home. Calculate your monthly payments and total closing costs for each choice below. Briefly discuss how you would decide between the two choices. Choice 1: 20-year fixed rate at 6% with closing costs of $2900 and no points. Choice 2: 20-year fixed rate at 5.5% with closing costs of $2900 and 4 points. What is the monthly payment for choice 1? A (Do not round until the final answer. Then round to the nearest cent as needed.)
You have saved $5,000 for a down payment on a new car. The largest monthly payment you can afford is $500. The loan will have an 11% APR based on end-of-month payments. a. What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent. b. What is the most expensive car you can afford if you finance it for 60 months? Do not round intermediate calculations. Round your answer to the nearest cent.
You are looking to buy a car and can afford to pay $195 per month. If the interest rate on a car loan is 0.74% per month for a 60-month loan, what is the most expensive car you can afford to buy? The amount that you can afford is $________________ (Round to the nearest dollar.)
You are purchasing a new car for $27,600. The dealership offers you three options: • 0% financing: 0 down and 0% financing for 48 months. • Rebate: 0 down. If you choose the rebate, you will need to secure a loan for the balance at your local bank. • Down payment: Make a down payment of 5% or more and get financing at 1.5% compounded monthly for 48 months:
The cardio equipment at a fitness studio needs to be replaced. The cost of new equipment is $16 500. The owner of the studio does not have enough cash to pay for it. She has two options: • Use a line of credit with an interest rate of 12.4%, compounded monthly. • Lease the equipment for 2 years, for $1000 down and $480 each month. a) What is the cost of buying with a line of credit if the owner pays off the loan in 2 years? b) What is the cost of leasing for 2 years? c) The equipment depreciates at 30% per year. What is its value after 2 years?
A car buyer can afford a monthly payment of $450 per month and has $7000 saved for a down payment. If financing is available at 3.2% interest for 72 months, then what would be the maximum car price they could afford? (You may round your answer to the nearest dollar.)
You are ready to make a new car purchase and the manufacturer is offering a 60-month, zero percent interest loan, or, a $1,500 cash rebate. The price of the car is $25,000. Which option should you choose? a. $1,500 cash rebate b. Not enough information to make the decision. c. Negotiate to get both d. Zero percent loan e. None of the answers are correct
You are in the process of getting a new car but are not sure if you should buy or lease. The total cost of the car is $21,000, and you have a $275 monthly spend budget for payments. If you lease the car, the terms of the lease will be forty-eight months at an APR of 2.25%. The residual value of the car is $8,000. If you buy the car, a bank will offer an APR of 2.70% and seven years to repay the loan. You are not required to make a down payment with either the lease or loan options, and payments are made at the end of the month for both options. Should you lease or buy the car given your budget limit of $275 a month? Create a new workbook that shows the difference between leasing and buying the car in terms of monthly payments.
A new homeowner is purchasing a living room set for $2,590 and must decide between two monthly installment financing offers.Offer 1: $200 down payment, remaining balanced financed at a 24.90% interest rate for 3 years.Offer 2: $425 down payment, remaining balanced financed at a 22.90% interest rate for 4 years.Part A: What is the total cost of offer 1? Explain which technology you used to solve and each step of your process. Part B: What is the total cost of offer 2? Explain which technology you used to solve and each step of your process.Part C: Which financing offer should the new homeowner choose?
Please show working and answer a and b 1. You have saved $4,000 for a down payment on a new car. The largest monthly payment you can afford is $500. The loan will have an 8% APR based on end-of-month payments. (A) What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent.$ What is the most expensive car you can afford if you finance it for 60 months? Do not round intermediate calculations. Round your answer to the nearest cent.$

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