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(Net advantage to leasing) You want to lease a car that costs $25,000 new. You can lease it with zero down for $500 per month
(Net advantage to leasing) You want to lease a car that costs $25,000 new. You can lease it with zero down for $500 per month at the start of each month for the next five years, and then buy the car for $8,000 at the end of the lease. Your rich uncle thinks leases are a bad deal and offers to loan you the $25,000 at a 9% APR interest rate. You cannot deduct interest expense or car depreciation on your tax return. What do you tell your uncle? Provide the formula and rationale for answer.
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