A sales representative is considering two options for a car. The first is a lease requiring a down payment of $5000 and monthly payments at the end of each month of $475.00 for four years. She can buy the car at the end of the four years for $8000. The second option is to finance the car through the bank with $5000 down, and $650 per month for four years. If interest is 5.8% compounded monthly, should she lease or buy? What is the economic advantage of her choice?

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The Answer of A sales representative is considering two options for a car. The first is a lease requiring a down payment of $5000 and monthly payments at the end of each month of $475.00 for four years. She can buy the car at the end of the four years for $8000. The second option is to finance the car through the bank with $5000 down, and $650 per month for four years. If interest is 5.8% compounded monthly, should she lease or buy? What is the economic advantage of her choice?

A Sales Representative Is Considering Two Options for a Car