Question

Jennifer is leasing a car from a local auto retailer. The terms of the lease include a 9% interest rate for 36 months with a residual value of 57%. The MSRP for the car Jennifer is leasing is $17,500. What will Jennifer’s monthly lease payment be? a. $93.84 b. $99.75 c. $209.03 d. $312.06

Answer 1

Answer:

d. $312.06

Step-by-step explanation:

The terms of the lease include a 9% interest rate for 36 months with a residual value of 57%

So, residual value is = $17500\times0.57$= $9,975

The value of the car = $17500-9975$ = $7,525

Monthly payment = $\frac{7525}{36}$= $209.03

Interest incurred = (17500+9975)\times0.00375= $103.03  

Hence, Jennifer’s monthly lease payment will be =

$209.03+103.03$ = $312.06