Samantha just started a new IT business and is thinking of leasing a new car. A lease company offers her a deal which comprises a $20 000 payment on delivery of the vehicle, a $12.000 payment at the end of year 1, a $14 000 payment at the end of year 2 and a $18000 payment at the end of year 3. If Samantha wants to take over the ownership of the vehicle, she must pay another $20 000 at the end of year 3. The lease provider states the interest rate it has charged is 15 per cent. Ignore taxation.
a. From these data, calculate the total price of the new vehicle.
b. If the price of the new vehicle were $62000, what is the implied interest rate for the lease?
c. If the price of the new vehicle were $54000, what is the implied interest rate for the lease?