Amanda must decide to buy or lease a car that she has selected. She has negoiated a purchase price of $35,000 and can borrow money from her credit union by putting $3,000 down and paying $751.68 per month for 48 months at 6% APR. Alternatively, she could lease the car for 48 months at $495 per month by paying $3,000 capitalized cost reduction and a $350 dispostition fee on the car whic is project to have a residual value of $12,100 at the end of the lease. 1. What is the buying dollar cost? 2. What is the leasing dollar cost?
Amanda must decide to buy or lease a car that she has selected. She has negoiated a purchase price of $35,000 and can borrow money from her credit union by putting $3,000 down and paying $751.68 per month for 48 months at 6% APR.
Alternatively, she could lease the car for 48 months at $495 per month by paying $3,000 capitalized cost reduction and a $350 dispostition fee on the car whic is project to have a residual value of $12,100 at the end of the lease.
1. What is the buying dollar cost?
2. What is the leasing dollar cost?
Given information:
Purchase price is $35,000
Down payment $3,000
Paying monthly $751.68 for 48 months
APR is 6%
Lease:
Monthly payment of $495 for 48 months,
Capitalized cost $3,000
Disposition fee $350
Residual value $12,100
Calculation buying dollar cost and leasing dollar cost:
Excel workings:
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