Chapter 3, Problem 28P

The monthly lease payment. Pmt, of a new car can be calculated by:

$Pmt=\frac{\left[Pv-\frac{Fv}{{(1+i/12)}^N}\right]}{\frac{1-\frac{1}{1+{(1+i/12)}^N}}{i/12}}$

where Pv and Fv are the present value and the future value (at the end of the lease) of the car, respectively. N is the duration of the lease in months, and i is the interest rate per year. Consider a 36-months-lease of a car with a present value of $38.000 and a future value of $23.400. Calculate the monthly payments lithe yearly interest rates are 3, 4, 5, 6, 7, and 8%. To carry out the calculation, first create a live-element vector with the values of the interest rates (0.03, 0.04, ...). Then use the vector in the formula using element-by- element operations.