Lease-versus-purchase decisionPersonal Finance ProblemJoanna Browne is considering either leasing or purchasing a new Chrysler Sebring convertible that has amanufacturer's suggested retail price (MSRP) of $33,100. The dealership offers a 3-year lease that requires a capital payment of $3,450 ($3,100 down payment + $350 securitydeposit) and monthly payments of $496. Purchasing requires a $2,640 down payment, sales tax of 6.1% ($2,019), and 36 monthly payments of $902. Joanna estimates the value of the car will be $17,000 at the end of 3 years. She can earn 5.1% annual interest on her savings and is subject to a 6.1% sales tax on purchases. Make a reasonable recommendation to Joanna using a lease-versus-purchase analysis that, for simplicity, ignores the time value of money.

a.Calculate the total cost of leasing.

b.Calculate the total cost of purchasing.

c.Which should Joanna do?