Question
You are graduating from UIC and need a car. After considering many vehicles, you have decided that you want a new Chevrolet. You can either
You are graduating from UIC and need a car. After considering many vehicles, you have decided that you want a new Chevrolet. You can either lease or buy the car and want to decide which is the better choice. Here are the relevant facts: Please select each of the right answers
| Buy | Closed End Lease |
| Purchase Price: $30,000 | Initial Payments: Down payment $2,000 Security deposit $300 |
| Down Payment: $3,000 | Term of Lease: 3 years |
| Sales Tax: 10% | Monthly Lease payments: $500 |
| Finance $27,000 for 36 months @ 6% | Interest Rate on Savings: 1% |
| Residual Value: $17,000 |
|
| Interest Rate on Savings: 1% |
|
| A. | At the end of the lease, you own the car | |
| B. | The cost of leasing the car is $18,000 | |
| C. | The cost of leasing the car is $20,060 | |
| D. | The cost of buying the car is $30,000 | |
| E. | The cost of buying the car is $18,750 |
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