John got a job at a law firm and Within a year, he had saved $5000 and decided to buy a new car but was not quite sure if he should lease it or buy it through financing from the bank. Assume a rate of interest of 5.50% compounded annually for both options.

1.Be sure to include the residual value (with HST, 13 %) at the end of the last payment interval, the net price, and the after-tax payments at equal payment intervals.

Leasing the car
Down payment		$5,000.00
Interest (compounded annually)		5.50%
Term in months		72
Monthly payments (without HST)		$220.00
		(beginning-of-month payments)
Residual (FV) payment to own		$13,800.00
Financing the car
Down payment		$5,000.00
Interest (compounded annually)		5.50%
List Price		$26,500.00
Additional purchase costs		$1,941.00
Term in months		72