Item$2$

$50$

points

eBookPrintReferencesCheck my workCheck My Work button is now enabledItem $2$

Continuing Case $37.$ Comparing Cash and Credit Purchases

It sputtered and squeaked and with a small hesitation followed by an abbreviated lunge, it was finally over: Ol$$ Reliable, the car Jamie Lee had driven since she first earned her driver$$s license at the age of $17,$ completed its last mile. Thirteen years and $140,000$ miles later, it was time for a new vehicle.

After skimming the Sunday newspaper and browsing the online advertisements, Jamie Lee was ready to visit car dealers to see what vehicles would interest her. She was unsure if she would purchase a car brand new, used, finance with a down payment, or lease. $$No money down and only $$231$ a month,$$ Jamie Lee read, $$with approved credit.$$ Sounded like an offer she would be interested in$.$ Jamie Lee knew she had a good credit rating as she made sure she paid all of her bills on time each month, and kept a close eye on her credit score ever since she was the victim of identity theft several years ago. The more she thought about the brand new car, the more excited she became. That new car fit her personality perfectly!

As Jamie Lee inquired about the advertised vehicle with the new car salesperson, her excitement quickly turned to dismay. The automobile advertised was available for $$231$ a month with no money down, based on approved credit, but Jamie Lee unexpectedly found that there were further qualifications in order to get the advertised price. The salesman explained that the information in the fine print of the newspaper advertisement stated that the price was based on all of the following criteria: being active in the military, a college graduate within the last three months, a current lessee of the automobile company, and having a top tier credit score, which he noted was above $800.$ If Jamie Lee did not meet all of the qualifications, she would not receive the price advertised in the promotion. But, he noted, he could get her in that vehicle, but it would cost her an additional $$115$ per month. Two hundred and seventy$-$five dollars was the maximum Jamie budgeted for a monthly payment. This vehicle was outside of her financial plan.

Jamie Lee had to start over from scratch. She decided that she must fully research the vehicle purchase process before browsing at another dealership. She felt she was getting caught up in the moment and vowed to do her research before speaking with another salesperson.

Complete the table below to compare the costs and benefits of a cash purchase versus a credit purchase. Each answer must have a value for the assignment to be complete. Enter $"0"$ for any unused categories. See below for the necessary data. See Addendum B for the necessary data.

Research for Nissan Versa Sedan $2016$

$*4$ speed automatic

$*$Air conditioning

$*$Bluetooth$$ hands$-$free phone system

Credit Purchase Lease

Total price of car $ $16,235\mathrm{.}00$ Total price of car $ $16,235\mathrm{.}00$

Down payment $()$ $ $710\mathrm{.}00$ Acquisition fee $(+)$ $ $655\mathrm{.}00$

Amount financed $ $17,700\mathrm{.}00$ Adjusted capitalized cost $ $16,530\mathrm{.}00$

Length of time $60$ MONTHS Length of time $36$ MONTHS

Interest rate $3\mathrm{.}66\%$ Security deposit $ $300\mathrm{.}00$

Monthly payment $ $295\mathrm{.}00$ Monthly payment $ $299\mathrm{.}00$

Savings account interest earned rate $=1\mathrm{.}06\%$

Estimated value of car at end of loan $$ $$5,200$

www$.$nissanusa.com

Jamie Lee intends to use the car for at least five years before selling or trading it for a small SUV.

Note that there is a $$400$ rebate offer for cash purchase.

The tax is calculated using the Total cost of vehicle.

Total cost of vehicle $ $16,235\mathrm{.}00$

Tax $[3\%]$

Tags and registration $($delivery$/$set up fees$)$ $ $79\mathrm{.}00$

PrevQuestion $2$ of $2$ Total$2$ of $2$Visit question mapThis is the last question in the assignment. To submit, use Alt $+$ S$.$ To access other questions, proceed to the question map button.Next