Problem $5-32$ Annuity Due $($LO$3)$

Your landscaping company can lease a truck for $$8,100$ a year $($paid at year$-$end$)$ for $7$ years. It can instead buy the truck for $$43,000.$ The truck will be valueless after $7$ years. The interest rate your company can earn on its funds is $8\%.$

a$.$ What is the cost of leasing? $($Do not round intermediate calculations. Round your answer to $2$ decimal places.$)$

Present value of lease $

b$.$ Is it cheaper to buy or lease?

Buy

Lease

What if the lease payments are an annuity due, so the first payment comes c$-1.$ immediately? $($Do not round intermediate calculations. Round your answer to $2$ decimal places.$)$

Present value of lease $

c$-2.$ Is it cheaper to buy or lease?

Buy

Lease