Amanda Forsythe of Springfield, Missouri, must decide whether to buy or lease a car she has selected. She has negotiated a purchase price (gross capitalized cost) of $30,000 and could borrow the money to buy from her credit union by putting $2,500 down and paying $645.84 per month for 48 months at 6 percent APR. Alternatively, she could lease the car for 48 months at $370 per month by paying a $2,500 capitalized cost reduction and a $350 disposition fee on the car, which is projected to have a residual value of $12,200 at the end of the lease. Round your answers to the nearest cent. Finance charges (borrowing the car): $ The dollar cost of leasing: $

Amanda Forsythe of Springfield, Missouri, must decide whether to buy or lease a car she has selected. She has negotiated a purchase price (gross capitalized cost) of $30,000 and could borrow the money to buy from her credit union by putting $2,500 down and paying $645.84 per month for 48 months at 6 percent APR. Alternatively, she could lease the car for 48 months at $370 per month by paying a $2,500 capitalized cost reduction and a $350 disposition fee on the car, which is projected to have a residual value of $12,200 at the end of the lease. Round your answers to the nearest cent. Finance charges (borrowing the car): $ The dollar cost of leasing: $

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter1: Federal Income Taxation—an Overview

Section: Chapter Questions

Problem 60P: Michiko and Saul are planning to attend the same university next year. The university estimates...

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Amanda must decide to buy or lease a car that she has selected. She has negoiated a purchase price of $35,000 and can borrow money from her credit union by putting $3,000 down and paying $751.68 per month for 48 months at 6% APR. Alternatively, she could lease the car for 48 months at $495 per month by paying $3,000 capitalized cost reduction and a $350 dispostition fee on the car whic is project to have a residual value of $12,100 at the end of the lease. 1. What is the buying dollar cost? 2. What is the leasing dollar cost?
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