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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
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 $43,000. The dealer has a special leasing arrangement where you pay $2,300 today and $525 per month for the next four years. When the lease ends, you will return the car and walk away with nothing. If you purchase the car, you will pay it off in monthly payments over the next four years at the competitive market interest rate of 0.5% per month. What break-even resale price in four years would make you indifferent between buying and leasing
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