After deciding to buy a new car, you can either lease the car or purchase it on a four-year loan. The car you wish to buy costs $33,500. The dealer has a special leasing arrangement where you pay $96 today and $496 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 a 7 percent APR, compounding monthly. You believe you will be able to sell the car for $21,500 in four years.

What is the cost of purchasing the car today?

What is the cost of leasing the car today?

What break-even resale price on four years would make you indifferent between buying and selling?