PART B: Buy or Lease? (30 marks) Here's the scenario: you have $1900 in savings and you need a car. You qualify to either buy or lease a car. You've gathered the following information: To buy the car The purchase price of the car is $14,900. A 5% minimum down payment is required. The sales tax rate is 7%. The interest rate for buying the car is 6.15%. With a minimum down payment of 5%, the monthly payment is $357.97. Licensing and other fees total approximately $500. With normal driving, the car will be worth $6,495 after four years. Due at signing: Down payment and license taxes and fees To lease the car The purchase price is $14,900. A 5% capital cost reduction payment down payment) is required at the beginning of the lease. The sales tax rate is 7% on the monthly payment amount and on the capital cost reduction payment The interest rate for leasing the car is 6.15%. The monthly lease payment, including sales tax and cost of money factor, is $227.50. Licensing and other fees total approximately $500. The residual value at the end of the lease term is $6,495. Due at signing: Capital reduction fee, first monthly payment including sales tax, and license taxes and fees. To help you answer the following questions necessary when trying to decide your best option, go through the assignment step by step. You will see these same questions again as you move along so don't worry about answering them now. To help you answer the following questions necessary when trying to decide your best option, go through the assignment step by step. You will see these same questions again as you move along so don't worry about answering them now. What is the total cost of buying a car over 48 months? What is the total cost of leasing a car over 48 months? What are the trade offs when considering leasing or buying? Should you purchase or lease the car