Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
1) You are thinking of leasing a car
1) You are thinking of leasing a car. The price of the car is ?$55,000. You have ?$3,000 for a down payment. The term of the lease is four years and the interest rate is 3.5?% APR. The buyout on the lease is? 51% of its purchase price and it is due at the end of the term. What are the monthly lease payments? (before tax)?
2) You are thinking of leasing a car. The price of the car is ?$60,000. You have ?$4,000 for a down payment. The term of the lease is five years and the interest rate is 3?% APR. The buyout on the lease is? 51% of its purchase price and it is due at the end of the term. What are the monthly lease payments? (before tax)?
Expert Solution
1) We can calculate the monthly lease payments by using the following formula in excel:-
=pmt(rate,nper,-pv,fv)
Here,
Pmt = Monthly lease payments
Rate = 3.5%/12 = 0.29167% (monthly)
Nper = 4*12 = 48 periods (monthly)
PV = $55,000 - $3,000 = $52,000
FV = $55,000*51% = $28,050
Substituting the values in formula:
= pmt(0.29167%,48,-52000,28050)
= $617.24
2) We can calculate the monthly lease payments by using the following formula in excel:-
=pmt(rate,nper,-pv,fv)
Here,
Pmt = Monthly lease payments
Rate = 3%/12 = 0.25% (monthly)
Nper = 5*12 = 60 periods (monthly)
PV = $60,000 - $4,000 = $56,000
FV = $60,000*51% = $30,600
Substituting the values in formula:
= pmt(0.25%,60,-56000,30600)
= $532.90
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
