You have the option to either i) purchase a car outright for $20,000 or ii) lease the same model of car for five years at an annual cost of $5,500. If the car is purchased outright it will have a useful life of five years at the end of which it would be sold for scrap generating proceeds of $1,000. Based on equivalent annual cost and assuming r = 9%, which of the below statements is correct?

Leasing the car would be $500 per year more expensive

Purchasing the car outright would be $525 per year cheaper

Purchasing the car outright would be $191 per year cheaper

Leasing the car would be $142 per year more expensive