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Based on the assumptions below, what would be the principal (loan) amount, costs, and benefits to leasing and buying a new car? Background: [You do
Based on the assumptions below, what would be the principal (loan) amount, costs, and benefits to leasing and buying a new car?
Background: [You do not need to do any outside research!] You are going to either lease a car for five years or buy a car, finance it, and sell it at the end of five years Lease payments are $299 per month The new car would cost $20.999 and you would pay off this loan monthly over five years. You could sell the car for $10,000 after five years You aren't sure what interest rate you will get, so you want to analyze for a 1.9%, 3.9%, and 5.9% interest rate. If you didn't buy or lease a car, you could invest and earn a 7% return In both cases all maintenance is covered by either the lease or warranty, and the costs of use (e.g. gas) would be the same. In both cases you get $5,000 of benefits from the car each year Background: [You do not need to do any outside research!] You are going to either lease a car for five years or buy a car, finance it, and sell it at the end of five years Lease payments are $299 per month The new car would cost $20.999 and you would pay off this loan monthly over five years. You could sell the car for $10,000 after five years You aren't sure what interest rate you will get, so you want to analyze for a 1.9%, 3.9%, and 5.9% interest rate. If you didn't buy or lease a car, you could invest and earn a 7% return In both cases all maintenance is covered by either the lease or warranty, and the costs of use (e.g. gas) would be the same. In both cases you get $5,000 of benefits from the car each year
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