Accounting

You want to buy a car that has a cash price of $12,000. You have two alternatives for financing the purchase Alternative (2) You can lease the car, which requires no money down, 20 monthly payments of $450 each, starting one month from today, and a balloon payment of $5,000 due the same day as the last of the monthly payments. Compute the present value of this alternative using an annual rate of 12 percent as the discount rate. SHOW YOUR CALCULATIONS