1 - In this problem, we will compare the merits of leasing. vs. buying a car. When you lease a car, you will 7.: t'typicalty have a'smaller pay H _ ,ment for a shorter period of time. This sounds attractive, but at the end of the ' i lease you-either have to buy the car or get a new car with no equity. if you buy a car, you have equity. You , 7 _ _ tie-in or sell it outright when you want to buy your next car. We want to see if it 3.173137395553753 to lease then buy the car after the lease. :' {Tit make the comparison, we're going to assume you can afford the payment on a new car. if you choose to '2 lease, you will set aside the money you're saving into an annuity. If the car payment is $500 but the lease payment is $300, then you are going to set aside $200 per month into the annuity. At the end of the lease, 1'1: , _ you will use the money from the annuity to make a down payment on buying out the car. Then you'll take 1 f out a new loan to pay off the car. 7 ' car We Witt be looking at a Ford Fusion that has a selling price of $43,000. i ' Buying the i(tar You are going to buy the car with monthly payments at 3.3% interest for 6 years. Your monthly payment will be: $659 How much money will you pay over the life of the loan? 5' ] 36-month Lease You are 'given the option to lease the same car for 36 months. Your payment will be $546 .per month. You oan'thenlhuy the carat the end of the lease for $27,520. Since you can afiord'SSSQ per month, how much money would you be putting into an annuity each month? 5 If the annuity offers 1.0% annualinterest, how much money will be in your account at the end of 36 months? '5 (Round to the nearest dollar.) At the end of the lease, you owe $27,520. if you use the money from your annuity as a down payment how much is left that you need to borrow? S i If you are going to finance the remaining balance at 3.3% interest for 2 years, what will. your payment be? 5 (Round to the nearest dollar.) Fill in the following table to help determine the money you have spent out of pocket over five years: Total of Lease Payments 5 E