Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Michael is considering getting a closed-end lease on a car for 48 months. The car dealer quotes him a monthly payment of $349. If Michael

Michael is considering getting a closed-end lease on a car for 48 months. The car dealer quotes him a monthly payment of $349. If Michael were to buy the car with the same down payment, his monthly payment would be $465 a month. Michael's lease payment is lower because

1-he is paying finance charges only on the amount of the car that will be depreciated over four years.

2-car dealers make a lower profit on leased cars.

3-leased cars do not come with a manufacturer's warranty.

4-he is not paying for the residual value of the car at the end of four years.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance

Authors: Jeff Madura

5th edition

132994348, 978-0132994347

More Books

Students also viewed these Finance questions

Question

Draw a labelled diagram of the Dicot stem.

Answered: 1 week ago