IN CLASS ASSIGNMENT $7$

You are buying a new vehicle and trying to determine what payment option you want. The salesperson has offered three options: $(1)$ a cash price of $$23,000$ paid today, $(2)$ a five year lease with $$3600$ per year starting at the signing of the lease of the vehicle and a buyout price of $$9500$ at the fifth year, $(3)$ Er a six year finance with $$4500$ per year starting at the signing of the finance of the vehicle. Assume that the interest rate for the first three years is $3\%$ and the years after is $5\%.$

a$.$ Draw the number line and accurately show the lease$/$buyout option.

b$.$ and calculate the present value of the lease option.

c$.$ Draw the number line and accurately show the finance option.

d$.$ and calculate the present value of the finance option.

e$.$ Which payment option would you choose? Why?