Using Excel:

You are interested in getting a new Lexus and the dealer is willing to sell it to you for $35,000. At the end of 4 years, you will sell the car at a value of $20,000. Alternatively, you can lease if for $5,000 down and $450 per month ($5,400 per year)

Scenario 1: The funds used to either lease or buy are in an account earning 5% per year. What should you do? Buy or Lease?

Scenario 2: What if we change the scenario so that you are borrowing from a friend who was charging you 15%? What should you do? Buy or Lease?

There are 4 cases in total (Scenario 1 Buy, Scenario 1 Lease, Scenario 2 Buy, Scenario 2 Lease). In each of the 2 scenarios in the file, choose BUY or LEASE.