Honda is offering to its top credit customers a lease on its new CR$-$V EX$-$L $2024$ model priced at

$$33,175,$ with lease payments of $$498$ at the start of each month for $36$ months with $$2500$ down

payment and an option to buy the vehicle at $$15,000$ after the lease period.

If the lease financing is at $3\mathrm{.}6\%$ APR, how much would you have paid as total amount of

$$\_\_\_\_\_\_\_\_\_\_\_\_\_($to nearest $$),$ by the end of lease.

Hint:

To calculate the total amount paid by the end of the lease, we need to consider the

monthly lease payments, the down payment, and any additional costs.

You are given the following information:

Vehicle price $($CR$-$V EX$-$L $2024$ model$)=$ $$33,175$

Monthly lease payment $=$ $$498$

Down payment $=$ $$2,500$

Lease term $($t$)=36$ months.

Residual value $($option to buy the vehicle after the lease$)=$ $$15,000.$

APR $=3\mathrm{.}6\%.$

Step $1$: Calculate the total cost of the monthly lease payments using the annuity payment

formula:

$4$

Monthly Lease Payments$=$PMT$\backslash$times t$,$

where:

PMT is the monthly lease payment

t is the total number of payments $($lease term$)$

Total Amount you will pay by end of lease term

$=$Down Payment $+$ Monthly Lease Payments $+$ Residual Value

$=$ $$2500+$ $$498*36+$ $$15,000$

Evaluate the offer in terms of what you have learnt about time value of money