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You are looking at a lease on a 2020 Chevy Impala. The lease is for 36 months with a 4.9% annual interest rate. You must pay $3,025 immediately at signing and monthly payments starting one month after signing. The monthly lease cost is $500. At the end of the lease you have to pay a termination fee of $2,000. What is the equivalent monthly cost of the lease? What is the most you should be willing to pay today to get the same car for 36 months?

You are looking at a lease on a 2020 Chevy Impala. The lease is for 36 months with a 4.9% annual interest rate. You must pay $3,025 immediately at signing and monthly payments starting one month after signing. The monthly lease cost is $500. At the end of the lease you have to pay a termination fee of $2,000. What is the equivalent monthly cost of the lease? What is the most you should be willing to pay today to get the same car for 36 months?

Essentials Of Investments
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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You are looking at a lease on a 2020 Chevy Impala. The lease is for 36 months with a 4.9% annual interest rate. You must pay $3,025 immediately at signing and monthly payments starting one month after signing. The monthly lease cost is $500. At the end of the lease you have to pay a termination fee of $2,000. What is the equivalent monthly cost of the lease? What is the most you should be willing to pay today to get the same car for 36 months?
Transcribed Image Text:You are looking at a lease on a 2020 Chevy Impala. The lease is for 36 months with a 4.9% annual interest rate. You must pay $3,025 immediately at signing and monthly payments starting one month after signing. The monthly lease cost is $500. At the end of the lease you have to pay a termination fee of $2,000. What is the equivalent monthly cost of the lease? What is the most you should be willing to pay today to get the same car for 36 months?
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