You receive a $35,000 car LEASE at 6% nominal annual for 60 months. Interest is

Question

You receive a $35,000 car LEASE at 6% nominal annual for 60 months. Interest is compounded daily and you make monthly payments. Your Residual value at the end of your lease is $15,000. Assume LEASE payments are made at the beginning of the month, and LOAN payments are made at the end of the month. Answer the following questions:

What is your monthly payment____________

If you can invest your money at 12% annual compounded monthly, would you prefer leasing or purchasing this vehicle?_____________

Explanation / Answer

Answer:

1.Monthly Payment is = 461.66

2.Compond Interest is= 350 { C.I= P(1+r/n)^T}

Lease Is better than amount invested on compond Interset

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