4. You plan to lease (Begin Mode!!!) a new care today. The dealership's finance office quotes you a deal with no money down and a $450 monthly payment (assume no taxes) for the next 36 months. Atthe end of the 36 months you plan to buy the car for $18,000. Thelisted price today for the car is $30,000 What CAP RATE (the interest rate on the lease) are they charging for this lease deal? Some notes: Think about which way your cash flows go. You willl make a $450 payment each month. You will also pay $18,000 at the end of the lease if you buy the car The I/Y you calculate for the MONTHLY payments is not the final answer! 1. 2. N I/Y PV PMT FV CAP RATE on the lease: (This is the answer to the question)
4. You plan to lease (Begin Mode!!!) a new care today. The dealership's finance office quotes you a deal with no money down and a $450 monthly payment (assume no taxes) for the next 36 months. Atthe end of the 36 months you plan to buy the car for $18,000. Thelisted price today for the car is $30,000 What CAP RATE (the interest rate on the lease) are they charging for this lease deal? Some notes: Think about which way your cash flows go. You willl make a $450 payment each month. You will also pay $18,000 at the end of the lease if you buy the car The I/Y you calculate for the MONTHLY payments is not the final answer! 1. 2. N I/Y PV PMT FV CAP RATE on the lease: (This is the answer to the question)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:4. You plan to lease (Begin Mode!!!) a new care today. The dealership's finance office quotes you a deal
with no money down and a $450 monthly payment (assume no taxes) for the next 36 months. Atthe
end of the 36 months you plan to buy the car for $18,000. Thelisted price today for the car is $30,000
What CAP RATE (the interest rate on the lease) are they charging for this lease deal?
Some notes:
Think about which way your cash flows go. You willl make a $450 payment each month. You will
also pay $18,000 at the end of the lease if you buy the car
The I/Y you calculate for the MONTHLY payments is not the final answer!
1.
2.
N
I/Y
PV
PMT
FV
CAP RATE on the lease:
(This is the answer to the question)
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