You must decide whether to buy a new car for

$17,000

or lease the same car over a three-year period. Under the terms of the lease, you can make a down payment of

$3000

and have monthly payments of

$150

.

At the end of the three years, the leased car has a residual value (the amount you pay if you choose to buy the car at the end of the lease period) of

$13,000

.

Assume you can sell the new car at the end of the three years at the same residual value. Is it less expensive to buy or to lease?