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Eastern Motors Auto Dealership wanted to estimate the average CLV over a 5 year time horizon of a customer who purchases a new vehicle. The

Eastern Motors Auto Dealership wanted to estimate the average CLV over a 5 year time horizon of a customer who purchases a new vehicle. The average vehicle sells for $24,200 and has a margin of 7%. Based on historical averages, 76% of people buying a new vehicle at Eastern will return for service 10 times over the next 5 years. Though it varies considerably, Eastern generates approximately $122 in margin on each service visit after accounting for parts and direct labor costs. Not including service, what is the average dollar margin for each new vehicle sold?

Leslie wanted to invest $14,000 for one year. She had three options: Option 1 would pay her a 2.3% annual interest rate for the year. Option 2 would pay a 0.45% monthly interest rate for 1 year. Finally, Option 3 would would provide Leslie with $440 of interest at the end of one year.

What is the interest generated under option 2 presuming simple interest?

CALCULATED VARIABLES:

op1 = $322

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