A local car dealership is offering a 3-year lease deal for the latest model of the...
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A local car dealership is offering a 3-year lease deal for the latest model of the Honda Civic LX for $229 per month with $2,099 due at signing. Jared is debating whether he should lease or purchase the vehicle. While the lease option offers lower monthly payment and down payment and gives Jared the opportunity to drive a new car in three years without the hassle of having to sell the car, Jared is wondering if it is financially smart to lease a vehicle. The market price for a Honda Civic LX is $19,980, and the market value of a 3- year-old Honda Civic LX is $14,159. The current national average for auto loan interest rates is 5.27% on a 60-month loan. Assume that the down payment for buying the new car will be the same as the down payment for leasing the car. a. Build a spreadsheet model that calculates the monthly payment, principal payment, interest payment, beginning balance, and ending balance for each month of the 5-year loan period. What is the ending balance of the loan at the end of the 3-year period? Note: Round your answer to 2 decimal places. Ending balance at the end of the 3-year period: b. How much would Jared have paid out of pocket at the end of the 3-year lease period if he decides to lease the vehicle? Amount: c. Does buying or leasing make more financial sense to Jared? Does buying or leasing make more financial sense to Jared? d. For his weekend hobby of off-road driving, Jared wants to get an AWD Jeep Wrangler instead. A local dealer is offering a 3-year lease deal for the latest model of an AWD Jeep Wrangler for a monthly payment of $275 with $3,995 down. The same vehicle is for sale for $31,795. Jared found that a 3-year-old AWD Jeep Wrangler has a market value of $23,500. Is it less expensive for Jared to lease or purchase? What is the difference in dollar amount between the two options? Note: Round "Cost difference" to 2 decimal places. Which is less expensive? Cost difference in dollar amount after 3 years: A local car dealership is offering a 3-year lease deal for the latest model of the Honda Civic LX for $229 per month with $2,099 due at signing. Jared is debating whether he should lease or purchase the vehicle. While the lease option offers lower monthly payment and down payment and gives Jared the opportunity to drive a new car in three years without the hassle of having to sell the car, Jared is wondering if it is financially smart to lease a vehicle. The market price for a Honda Civic LX is $19,980, and the market value of a 3- year-old Honda Civic LX is $14,159. The current national average for auto loan interest rates is 5.27% on a 60-month loan. Assume that the down payment for buying the new car will be the same as the down payment for leasing the car. a. Build a spreadsheet model that calculates the monthly payment, principal payment, interest payment, beginning balance, and ending balance for each month of the 5-year loan period. What is the ending balance of the loan at the end of the 3-year period? Note: Round your answer to 2 decimal places. Ending balance at the end of the 3-year period: b. How much would Jared have paid out of pocket at the end of the 3-year lease period if he decides to lease the vehicle? Amount: c. Does buying or leasing make more financial sense to Jared? Does buying or leasing make more financial sense to Jared? d. For his weekend hobby of off-road driving, Jared wants to get an AWD Jeep Wrangler instead. A local dealer is offering a 3-year lease deal for the latest model of an AWD Jeep Wrangler for a monthly payment of $275 with $3,995 down. The same vehicle is for sale for $31,795. Jared found that a 3-year-old AWD Jeep Wrangler has a market value of $23,500. Is it less expensive for Jared to lease or purchase? What is the difference in dollar amount between the two options? Note: Round "Cost difference" to 2 decimal places. Which is less expensive? Cost difference in dollar amount after 3 years:
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Answer rating: 100% (QA)
a The ending balance of the loan at the end of the 3year period is 2451 The car loan is for 5 years and the interest rate is 527 The monthly payment is 229 and the down payment is 2099 The loan balanc... View the full answer
Related Book For
College Mathematics for Business Economics Life Sciences and Social Sciences
ISBN: 978-0321614001
12th edition
Authors: Raymond A. Barnett, Michael R. Ziegler, Karl E. Byleen
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