You are thinking about leasing a car. The purchase price of the car is $30,000. The residual value (the amount youcould pay to keep the car at the end of the lease) is $15,000 at the end of 36 months. Assume the first lease paymentis due one month after you get the car. The interest rate implicit in the lease is 6.00% APR, compounded monthly.What will be your lease payments for a 36-month lease? (Note: Be careful not to round any intermediate steps lessthan six decimal places.)Your monthly lease payments will be $(Round to the nearest cent.)

Leasing occurs when one party, the lessor, agrees to let another party, the lessee, use an asset for…

Answered: You are thinking about leasing a car.…

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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Similar questions

Your car dealer is willing to lease you a new car for $180 a month for 36 months. Payments are due on the first day of each month starting with the day you sign the lease contract. If your cost of money is 4.2 percent, what is the current value of the lease?
you are thinking about leasing a car the purchase price of the car is 26000. the residual value. the residual value (the amount you could pay to keep the car at the end of the lease) os 13,000 at the end of 36 months. assume the first lease payment is due one month after you get the car. the interest rate implicit in the lease 6% apr compounded monthly. what will be your lease payments for a 36 month lease
Your car dealer is willing to lease you a new car for $399 a month for 48 months. Payments aredue on the first day of each month starting with the day you sign the lease contract. If your costof money is 3 percent, what is the current value of the lease?
A car dealer is willing to lease you a car for $319 a month for 60 months. Payments are due on the first day of each month starting with the day you sign the lease contract. If your cost of money is 4.9 percent, compounded monthly, what is the current value of the lease?
You are interested in leasing a car for $425 per month, due at the beginning of each month. Using an interest rate of 4% annually, what is the present worth of a one-year lease for this car?
You are leasing some furniture for your apartment. The monthly lease is for $395/month, payable at the beginning of the month. If your personal cost of capital is a 3% nominal annual rate, what is the present value of a one-year lease?
Suppose you are a property owner and you are collecting rent for an apartment. The tenant has signed a one-year lease with $600 a month rent, payable in advance. Find the present value of the lease contract if the discount rate is 12% per year.
You are considering a loan vs a lease for a new piece of equipment. The price of the equipment is $34,500. You can obtain a five year loan for 4% APR compounded monthly. The other choice is a five year lease. What is the maximum interest rate (APR compounded monthly) the lease can be for payments to be equal to the loan payment? Assume you are making monthly payments.
You have just leased a car. The lease is for three years with monthly payments due at the beginning of the month. The APR on the lease is 6%. If the present value of the lease is $12,000, what is the monthly payment on the lease? Please round your answer to four decimal places.
Your lease calls for payments of $500 at the end of each month for the next 12 months. Now your landlord offers you a new 1-year lease which calls for zero rent for 3 months, then rental payments of $700 at the end of each month for the next 9 months. You keep your money in a bank time deposit that pays a simple annual rate of 5 percent. By what amount would your net worth change if you accept the new lease? (Hint: Your return per month is 5%/12 = 0.4166667%.) Group of answer choices +$509.81 −$509.81 +$253.62 −$253.62 +$125.30
Your car dealer is willing to lease you a new car for $190 a month for 36 months. Payments are due on the first day of each month starting with the day you sign the lease contract. If your cost of money is 5.2 percent, what is the current value of the lease? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
You are considering leasing a car for 48 months where the advertisement says that monthly payments are $399 with $5,000 due at signing. You have seen elsewhere that the market value of the new car is $35,000 and that the expected market value in 4 years is $25,000. What effective annual rate (EAR) are you paying for this lease?

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