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In: Finance

Jamie is looking to lease a car and is trying to understand how the monthly payments...

  1. Jamie is looking to lease a car and is trying to understand how the monthly payments will be determined. The new car has a sales price of $25,000. The lease will be for 3 years. What two other factors are needed here to calculate the monthly payments.
    1. The car salesman tells Jamie he could reduce his monthly payments if he pays $4,000 cash down-payment. Explain the disadvantage to Jamie in doing so.

Solutions

Expert Solution

>> To calculate residual value percentage and cash incentives and rebate included in monthly payment is required to calculate.

a. In doing as stated above followings are disadvantages:

>> If vehicle got stolen than there is no guarantee of getting downpayment back there.

>> It will also not decrease interest rate here.

jeff jeffy answered 2 years ago
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