PART B: Buy or Lease?

Here's the scenario: You need a car. You have $$2100\mathrm{.}00$ in savings, and you just won

$$2500\mathrm{.}00$ on a scratch$-$and$-$win ticket! You qualify to either buy or lease a car, for a

term of five years. You've gathered the following information $($NOTE: We are not

including any licensing fee here, which is extra, regardless of which option is chosen$)$:

To borrow and buy the car; financing option

The purchase price of the car is $$17,445\mathrm{.}00.$

Delivery$/$destination and dealer fees total $$2,449\mathrm{.}00.$

The sales tax rate is $15\%.$

The interest rate for financing the car varies depending on the term and is lower

for shorter terms. You are hoping to pay it down in five years, so for a $60-$month

term, the rate is $4\mathrm{.}49\%.$

With no down payment, the monthly payment $($tax included$)$ is $$426\mathrm{.}41.$

With a down payment of $$4000\mathrm{.}00,$ the monthly payment $($tax included$)$ is

$$351\mathrm{.}86.$

With normal driving, the car will be worth $$8296\mathrm{.}85$ after five years.

Initial amount due at signing: Only the down payment $($if any$).$

To lease the car

The purchase price is $$17,445\mathrm{.}00.$

Delivery$/$destination and dealer fees total $$2,449\mathrm{.}00.$

The sales tax rate is $15\%.$

The interest rate for leasing the car is $7\mathrm{.}49\%.$

The monthly lease payment, including the sales tax, is $$324\mathrm{.}70.$

The residual value of the vehicle at the end of the lease term is $$8,296\mathrm{.}85.$

Initial amount due at signing: First monthly payment.

Based on the information above, calculate the following and show all work.

To lease:

a$)$ Initial payment due at signing.

b$)$ Total of all monthly payments.

c$)$ Residual cost at conclusion of lease. This is what you pay if you decide to purchase the vehicle, so it will include sales tax.

d$)$ Total cost if you lease then purchase at the end of the five$-$year$-$ lease.