Given the following lease and buying option for a vehicle.

Lease options

 * $459/month, 3 year lease

*$3,999 down payment due at signing 

*$925 acquisition fee at start of the lease 

*$350 disposition fee at the end of the lease if the car is not purchased 

*Purchase option at end is $22,218 excluding taxes and government fees 

*Additional charge of $0.25/mile over 30,000 miles at the end of the lease 

 

Buy option

*$42,000 MSRP 

*6% APR, 3 year loan with a 10% down payment 

*No additional loan or purchase fee

*You can sell the car at the end of three years for $30,000

 

Questions 

1. If marcus were to lease the vehicle, how much money would he need to have ready upfront?

2. If marcus were to purchase the vehicle, how much would he need to have ready upfront?

3. Lets say marcus decides to purchase the car with an auto loan. What would be his monthly payment? Use three decimal points for your interest rate, Round your monthly payment to the nearest whole dollar 

4. If marcus leases the car, what would be the total cost he's spent on the car after returning the car in three years 

5. If marcus instead buys the car with the auto loan and sells it at the end of three years, how much money would he have? Ignore taxes

6. Besides math, why might marcus want to purchase the car instead of leasing?

Answer rating: 100% (QA)

1 Upfront cost for leasing Down payment3999 Acquisition fee925 Total upfront cost 3999 925 4924 2 Up... View the full answer