You are considering either leasing or purchasing a car. You notice an ad that says you can lease the car you want for $399.00 per month. The lease term is 36 months with the first payment due at inception of the lease. You must also make an additional down payment of $2,030. The ad also says that the residual value of the vehicle is $14,022. The list price of the vehicle is $27,686, but after much research, you have concluded that you could buy the car for a total "drive-out" price of $25,400. What is the quoted annual interest rate you are actually paying with the lease? 4.61% 8.79% 8.97% 4.52% 5.07%

You are considering either leasing or purchasing a car. You notice an ad that says you can lease the car you want for $399.00 per month. The lease term is 36 months with the first payment due at inception of the lease. You must also make an additional down payment of $2,030. The ad also says that the residual value of the vehicle is $14,022. The list price of the vehicle is $27,686, but after much research, you have concluded that you could buy the car for a total "drive-out" price of $25,400. What is the quoted annual interest rate you are actually paying with the lease? 4.61% 8.79% 8.97% 4.52% 5.07%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 6P

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Similar questions

You are considering either leasing or purchasing a car. You notice an ad that says you can lease the car you want for $616.00 per month. The lease term is 48 months with the first payment due at inception of the lease. You must also make an additional down payment of $1,340. The ad also says that the residual value of the vehicle is $21,937. The list price of the vehicle is $36,624, but after much research, you have concluded that you could buy the car for a total "drive-out" price of $33,600. What is the quoted annual interest rate you are actually paying with the lease?
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