Megan can purchase a new car for $30,000. Alternatively, in addition to a down payment of $2,000, Megan can make lease payments of $475 at the beginning of each month for three years to lease the car. The car has a residual value of $15,000. Assume that the cost of borrowing is 3.85% compounded monthly. Which option is economically better for Megan? In the lease option, what will be the buyback value of the vehicle at the end of two years?
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- Adam can purchase a new car for $30,000. Alternatively, in addition to a down payment of $2,200, Adam can make lease payments of $525 at the beginning of each month for three years to lease the car. The car has a residual value of $15,000. Assume that the cost of borrowing is 3.95% compounded monthly. a. Which option is economically better for Adam? Buy Now or Lease b. In the lease option, what will be the buyback value of the vehicle at the end of two years?You must decide whether to buy a new car for $19,000 or lease the same car over a three-year period. Under the terms of the lease, you can make a down payment of 1000$ and have monthly payments of $.150 At the end of the three years, the leased car has a residual value (the amount you pay i 12,000f you choose to buy the car at the end of the lease period) of $. Assume you can sell the new car at the end of the three years at the same residual value. Is it less expensive to buy or to lease? Question content area bottom Part 1 The cost for buying the car and selling it after three years would be $ enter your response here.Joel can purchase a new car for $25,000. Alternatively, in addition to a down payment of $2,400, Joel can make lease payments of $375 at the beginning of each month for three years to lease the car. The car has a residual value of $12,500. Assume that the cost of borrowing is 4.49% compounded monthly. a. Which option is economically better for Joel? Buy Now Lease b. In the lease option, what will be the buyback value of the vehicle at the end of two years? Round to nearest cent "I
- Li Jun can purchase a new car for $20,000. Alternatively, in addition to a down payment of $2,600, Li Jun can make lease payments of $500 at the beginning of each month for three years to lease the car. The car has a residual value of $10,000. Assume that the cost of borrowing is 4.47% compounded monthly. a. Which option is economically better for Li Jun? Buy Now O Lease b. In the lease option, what will be the buyback value of the vehicle at the end of two years? Round to nearest cent. SAVE PROGRESS SUBMIT ASSIGNMENTAn investor plans to purchase a 2-bedroom condo in San Francisco. The price of the property is $300,000. She will have a 15-year 3% APR mortgage with a 20% down payment. The investor will keep the condo in the next 15 years and lease the condo. Suppose the rent collected by the renter will just cover the mortgage payment and other expenses (e.g., condo fee, tax, maintenance). In other words, in- and out- cash flows just cancelled out. The value of the house is expected to inflate by 50%. What is the monthly return to the investor? Group of answer choices 14.377% 1.198% 1.126% 13.508%You are considering an option to purchase or rent a single residential property. You can rent it for $2,000 per month and the owner would be responsible for maintenance, property insurance, and property taxes. Alternatively, you can purchase this property for $200,000 and finance it with an 80 percent mortgage loan at 4 percent fixed-rate interest that will fully amortize over a 30-year period. The loan requires monthly payments. The loan can be prepaid at any time with no penalty. You have done research in the market area and found that (1) properties have historically appreciated at an annual rate of 2 percent per year, and rents on similar properties have also increased at 2 percent annually; (2) maintenance and insurance are currently $1,500.00 each per year and they have been increasing at a rate of 3 percent per year; (3) you are in a 24 percent marginal tax rate and plan to occupy the property as your principal residence for at least four years; (4) the capital gains exclusion…
- Maria can buy Car A, brand new, for $450/mo for a 4 year loan, or she can lease the same car for $395/mo for 3 years. Help Maria decide which option is best. 1. What will Maria's payments be in year 4 if she chooses each option? BUY LEASEBen Halls is trying to decide whether to lease or purchase a new car costing $18,000. If he leases, he’ll have to pay a $600 security deposit and monthly payments of $450 over the 36-month term of the closed-end lease. Ben could earn 1% on the amount of any down payment or security deposit. On the other hand, if he buys the car then he’ll have to make a $2,400 down payment and will finance the balance with a 36-month loan with a 4% interest rate; he’ll also have to pay a 6 percent sales tax ($1,080) on the purchase price, and he expects the car to have a residual value of $6,500 at the end of 3 years. Ben can earn 4 percent interest on his savingsAfter 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 $34,000. The dealer has a leasing arrangement where you pay $97 today and $497 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 6 percent. You believe that you will be able to sell the car for $22,000 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 of lease $ 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 of purchase $ 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…
- Emma runs a small factory that needs a vacuum oven for brazing small fittings. She can purchase the model she needs for $180,000 up front, or she can lease it for five years for $4200 per month. She can borrow at 7% APR, compounded monthly. Assuming that the oven will be used for five years, should she purchase the oven or should she lease it? O A. Buy, since the present value (PV) of the lease is $32,108 more than the cost of the oven. B. Lease, since the present value (PV) of the lease is $12,224 less than the cost of the oven. OC. Lease, since the present value (PV) of the lease is $8642 less than the cost of the oven. D. Lease, since the present value (PV) of the lease is $2212 less than the cost of the oven. 202 2021-12 ScreenS 2021-12 Next DI 80 888 F8 F6 F7 FS esc F3 F4 F2 9. OO O OEmma runs a small factory that needs a vacuum oven for brazing small fittings. She can purchase the model she needs for $180,000 up front, or she can lease it for five years for $4200 per month. She can borrow at 7% APR, compounded monthly. Assuming that the oven will be used for five years, should she purchase the oven or should she lease it? O A. Buy, since the present value (PV) of the lease is $32,108 more than the cost of the oven. O B. Lease, since the present value (PV) of the lease is $8642 less than the cost of the oven. O C. Lease, since the present value (PV) of the lease is $2212 less than the cost of the oven. O D. Lease, since the present value (PV) of the lease is $12,224 less than the cost of the oven.You are considering leasing a car. You notice an ad that says you can lease the car you want for R477.00 per month. The lease term is 60 months with the first payment due at inception of the lease. You must also make an additional down payment of R2,370. The ad also says that the residual value of the vehicle is R20,430. After much research, you have concluded that you could buy the car for a total "driveout" price of R33,800. What is the quoted annual interest rate you will pay with the lease?