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5. Many people lease their vehicle rather than buying it. The main reason is to avoid tying up so much of one's money in an

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5. Many people lease their vehicle rather than buying it. The main reason is to avoid tying up so much of one's money in an automobile. You determine that you can buy a new vehicle for a total cost of $27 000, or youcan lease the same vehicle by paying $4000 down plus lease payments of $400 at the end ofeach month for 36 months. At the end of the lease agreement, you return the car to the dealer and walk away. If you buy the car, best estimates are that in 3 years you will be able to sell t for $16 000. gnoring all other factors, at what interest rate j12 are these options equivalent

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