$5-$You are deciding whether to buy or lease a car that you like. You have negotiated a purchase

price $($gross capitalized cost$)$ of $$48,000$ and could borrow the money to buy from your credit

union by putting $$6,500$ down and paying $$787\mathrm{.}92$ per month for $60$ months at $5\mathrm{.}25$ percent

APR. Alternatively, you could lease the car for $60$ months at $$599$ per month by paying a $$4,000$

capitalized cost reduction and a $$550$ disposition fee on the car, which is projected to have a

residual value of $$12,500$ at the end of the lease. Which option is better?

$6-$You have been shopping for a new car, and you have negotiated a price of $$45,000$ on a model

that carries a choice of a $$4,500$ rebate or dealer financing at $3\mathrm{.}5$ percent APR. The dealer loan

would require a $$2,000$ down payment and a monthly payment of $$782\mathrm{.}25$ for $60$ months. You

also arranged for a loan from your bank with a $6\mathrm{.}5$ percent APR. Which option for the loan is

better for you?