After deciding to acquire a new car, you realize you can either lease it or purchase it with a four-year loan. The car you want costs $40,000. The dealer has a leasing arrangement where you pay $109 today and $509 per month for the next four years. If you purchase the car, you will pay it off in monthly payments over the next four years at an APR of 7%. You believe that you will be able to sell the car for $29177 in four years.

1. What is the present value of leasing the car
2. What is the present value) of purchasing the car?