Mary contracts to lease an automobile from Zippo Sales with payments of $300 per month for a year and a final balloon payment of $1,200.This final payment is:

Question

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According to the Consumer Leasing Act, a balloon payment at the end of the lease cannot be more than twice the average monthly payment. In this case, Mary is making payments of $300 per month for a year, totaling $3,600, so twice the average monthly payment is $600. Therefore, a final balloon payment of $1,200 exceeds the legal limit and is unlawful.

Mary Contracts to Lease an Automobile from Zippo Sales with Payments