Christina is buying a new Dodge Charger for 23,599. She has three different options, a purchase, a loan or a lease. After 5 years the projected sell back price of the car is 12,399 1. PURCHASE a. The purchase option is 0% down 0% APR if you have cash on hand. COST OF CAR: $ 2. LOAN a. The second option is taking out a loan for 5 years at 5.99% APR. She must make a 10% down- payment on this option, what will her end of month payments be on this option N= FV= 1% P/Y= PV= C/Y= PMT= PMT: END BEGIN 3. LEASE a. The third option is a lease where the end of month payment is $349 per month for 5 years (60 months). You must make a one-time balloon payment (or walk-away payment) of $1200 when you trade in your car. 4. Comparing PURCHASE LOAN LEASE MONTHLY PAYMENT x (times) number of total payments + down payment and or balloon payments TOTAL MONEY SPENT ON CAR - Selling back car after it is paid off TOTAL COST (OVERALL) Which option would you suggest for Christina to take and why? 5. Christino mokes 12.350 annual salary. Let's find out if she can afford the option you selected assume taxes are 28.8%) MONTHLY PRE-TAX SALARY $ RENT UTILITIES $ FOOD/GROCERY $ 150 150 MONTHLY POST-TAX SALARY:$ MEDICAL INSURANCE $ $ MONTHLY CAR PAYMENT $ $ 600 125 375 GAS $ CAR INSURANCE PHONE/INTERNET/CABLE S $ 100 150 TOTAL BILLS Do you think she can afford the car payment you selected Wanda and her husband just found out they are expecting triplets so they decide that it is time to buy a minivan. They choose to buy a Chrysler Town and Country for $34,650. They cannot afford the purchase option so they are looking at either taking out a loan or just leasing the car. 6. LOAN OPTION: The loan option is for five years at a 4.5% APR. They must make a 15% down payment a. What are the end of monthly payments on the car? N= FV 1% P/Y= PV= C/Y= PMT= PMT: END BEGIN b. What is the total money that they will spend on the car (if they do not trade it in/sell back) c. How much extra did they spend over the actual purchase price of the care (this is due to the fact that they had to pay interest) d. If they can sell it back for $21,550 in 5 years what would be the total cost of the car? 7. LEASE OPTION: The lease option is $459 per month with a $990 walk away fee at the end of the five year lease a. What is the total cost of the car under the lease? 5. Which option would you pick Wanda and her expanding family? Why? Christina is buying a new Dodge Charger for 23,599. She has three different options, a purchase, a loan or a lease. After 5 years the projected sell back price of the car is 12,399 1. PURCHASE a. The purchase option is 0% down 0% APR if you have cash on hand. COST OF CAR: $ 2. LOAN a. The second option is taking out a loan for 5 years at 5.99% APR. She must make a 10% down- payment on this option, what will her end of month payments be on this option N= FV= 1% P/Y= PV= C/Y= PMT= PMT: END BEGIN 3. LEASE a. The third option is a lease where the end of month payment is $349 per month for 5 years (60 months). You must make a one-time balloon payment (or walk-away payment) of $1200 when you trade in your car. 4. Comparing PURCHASE LOAN LEASE MONTHLY PAYMENT x (times) number of total payments + down payment and or balloon payments TOTAL MONEY SPENT ON CAR - Selling back car after it is paid off TOTAL COST (OVERALL) Which option would you suggest for Christina to take and why? 5. Christino mokes 12.350 annual salary. Let's find out if she can afford the option you selected assume taxes are 28.8%) MONTHLY PRE-TAX SALARY $ RENT UTILITIES $ FOOD/GROCERY $ 150 150 MONTHLY POST-TAX SALARY:$ MEDICAL INSURANCE $ $ MONTHLY CAR PAYMENT $ $ 600 125 375 GAS $ CAR INSURANCE PHONE/INTERNET/CABLE S $ 100 150 TOTAL BILLS Do you think she can afford the car payment you selected Wanda and her husband just found out they are expecting triplets so they decide that it is time to buy a minivan. They choose to buy a Chrysler Town and Country for $34,650. They cannot afford the purchase option so they are looking at either taking out a loan or just leasing the car. 6. LOAN OPTION: The loan option is for five years at a 4.5% APR. They must make a 15% down payment a. What are the end of monthly payments on the car? N= FV 1% P/Y= PV= C/Y= PMT= PMT: END BEGIN b. What is the total money that they will spend on the car (if they do not trade it in/sell back) c. How much extra did they spend over the actual purchase price of the care (this is due to the fact that they had to pay interest) d. If they can sell it back for $21,550 in 5 years what would be the total cost of the car? 7. LEASE OPTION: The lease option is $459 per month with a $990 walk away fee at the end of the five year lease a. What is the total cost of the car under the lease? 5. Which option would you pick Wanda and her expanding family? Why
