A vehicle lease has several costs. Which of the following is the interest rate used to calculate the monthly cost?

Question

Quizplus · Accepted Answer

The interest rate used to calculate the monthly cost is known as the money factor. Options A, C, and D are not interest rates - capitalized cost is the initial cost of the vehicle, payment schedule refers to the frequency and number of lease payments, and residual value refers to the estimated value of the vehicle at the end of the lease term. Therefore, only option B, the money factor, is the interest rate used to calculate the monthly lease cost.

A Vehicle Lease Has Several Costs