Question 23 Maria has decided to lease a new car. The price of the car is $39,600. Determine her monthly lease payment if she obtains a 3-year lease at 2.4% interest. The residual value of the car is $21,780

Question 23 Maria has decided to lease a new car. The price of the car is $39,600. Determine her monthly lease payment if she obtains a 3-year lease at 2.4% interest. The residual value of the car is $21,780

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter5: Making Automobile And Housing Decisions

Section: Chapter Questions

Problem 2FPE: Lease versus purchase car decision. Use Worksheet 5.1. Ben Hall is trying to decide whether to lease...

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Lease versus purchase car decision. Use Worksheet 5.1. Ben Hall is trying to decide whether to lease or purchase a new car costing $18,000. If he leases, he’ll have to pay a $600 security deposit and monthly payments of $450 over the 36-month term of the closed-end lease. Ben could earn 1% on the amount of any down payment or security deposit. On the other hand, if he buys the car, then he’ll have to make a $2,400 down payment and will finance the balance with a 4% interest rate. He’ll also have to pay a 6 percent sales tax ($1,080) on the purchase price, and he expects the car to have a residual value of $6,500 at the end of three years. Use the automobile lease versus purchase analysis form in Worksheet 5.1 to find the total cost of both the lease and the purchase, and then recommend the best strategy for Ben.
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