Question: third time I have to post this question please answer the three parts After deciding to acquire a new car, you realize you can either
third time I have to post this question please answer the three parts
| After deciding to acquire a new car, you realize you can either lease the car or purchase it with a two-year loan. The car you want costs $34,500. The dealer has a leasing arrangement where you pay $98 today and $498 per month for the next two years. If you purchase the car, you will pay it off in monthly payments over the next two years at an APR of 5 percent. You believe that you will be able to sell the car for $22,500 in two years. |
| What is the present value of purchasing the car? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| Present value | $ |
| What is the present value of leasing the car? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| Present value | $ |
| What break-even resale price in two years would make you indifferent between buying and leasing? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| Break-even sale price | $ |
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