Question

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Suppose you obtain a five-year lease for a Porsche and negotiate a selling price of $146,000. The annual interest rate is 8.4%, the residual value is $75,000, and you make a down payment of $3000. Find each of the following.

A.) The net capitalized cost.

B.) The money factor. (Rounded to four decimal places)

C.) The average monthly finance charge. (Rounded to the nearest cent).

D.) The average monthly depreciation. (Rounded to the nearest cent.)

E.) The monthly lease payment. (Rounded to the nearest cent.)

Answer 1

Answer:

Look down below

Step-by-step explanation:

A.)Net capitalized cost=146,000-3000= $143,000

Net capitalized cost = 143,000

B.)Money factor=8.4/100 over 24=0.084/24=0.0035

Money Factor= 0.0035

C.)Average monthly finance charge= (143,000+75,000)x 0.0035= 218,000 x 0.0035=$763

Average Monthly Finance Charge= $763

D.)Average monthly depreciation= 143,000-75000/5 x 12=68000/60=$1133.33

Average monthly deprecation= $1133.33

E.)monthly lease payment=1133.33/5= $226.66

Monthly lease payment= $226.66