How much would your monthly pretax lease paymentsbe?

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
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1. Suggest you are going to lease a car with an MSRP of $30 000. The manufacturer has set a residual of 60% for a 3-year lease. The dealer has agreed to a selling price of $28 000, and there's a rebate of $500 from the manufacturer. Also you will have a $1 700 advance payment and the lease carries an interest rate of 9% per year. How much would your monthly pretax lease paymentsbe?

Manufacturer's Suggested Retail Price MSRP USD 30,000.00
Negotiated sales price NSP USD 28,000.00
Lease Term LT month 36.00
Residual persentage RP dec. 0.60
Advance payment AP USD 1,700.00
Rebate R USD 500.00
Interest Rate APR % 9.00

Calculate the following

1. Calculation of Depreciation fee:      
Net capitalized cost NCC USD 25,800.00
Residual Value  RV USD 18,000.00
Depreciation over lease term  Dt USD 7,800.00
Depreciation charge (monthly) D USD 216.67
       
2. Calculation of Finance fee (Rent charge):
Money factor MF - 0.003750
Finance fee (monthly) F USD 164.25
       
3. Calculation of Lease payment (pretax):      
Monthly Lease Payment (Pretax) LP USD 380.92
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