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Roger has landed his first big contract. He is thinking of purchasing or leasing a Bentley 1. He can buy his dream car by taking out a 5 year loan for $20,000 at 7.30% interest rate per annum. He will need to repay in fixed monthly payments. 2. He can lease the vehicle from a local dealership instead. This 5 year lease option will require a $4,000 down payment and monthly payments of $230. The salvage value of the new vehicle after 5 years is S6,500 and you can invest at a rate of return of 4%. Buy Personal Investment Rate 4.0% 7.30% Interest Rate Number of years Value of Loan $20,000.00 6,500 Salvage Value Car Loan Payments Lease Down Payment 4,000 Monthly Payments 230 NPV of Buying Your sign matters here! NPV of Leasing Your sign matters here! Buy or Lease