Create an Excel model (show formulas too) to answer the following questions:

1)Assuming the first lease payment is due in one month, calculate the monthly interest rate of the lease option

2) Calculate the effective annual interest rate (EAIR) of the lease option.

Lease Option: Term: 36 months / 36,000 miles

Monthly Lease Payment: $350

Security Deposit: $0

Acquisition Fee: $695 (Due at lease signing)

Down Payment: $4,150 (Due at lease signing)

Disposition Fee: $395 (Due at end of lease)

Mileage Fee: $0.25 per mile for every mile above 36,000 (Due at end of lease)

Expected mileage: 40,000