You plan to buy a $35,000 car. A simplified leasing contract includes the following: (i) upfront cost of $5,000, (ii) $450 monthly lease payment over a 48-month period, and (iii)purchase cost of $18,000 at the end of the lease. Calculate the “implied” APR and EAR ofthe lease? Should you finance your purchase with the lease or a bank loan at 9%?

Answer rating: 100% (QA)

Calculate the total cost of the lease Upfront cost 5000 Monthly lease payment 450 for 48 months 2160... View the full answer