Nicholas can purchase a new car for $30,000. Alternatively, in addition to a down payment of $2,400, Nicholas can make lease payments of $425 at the beginning of each month for three years to lease the car. The car has a residual value of $15,000. Assume that the cost of borrowing is 3.43% compounded monthly.

a. Which option is economically better for Nicholas? ( show calculation)

Buy Now

or

Lease

b. In the lease option, what will be the buyback value of the vehicle at the end of two years?

Round to nearest cent.