The vehicle that you want to lease costs $87,000 new and you are required to pay...

The vehicle that you want to lease costs $87,000 new and you are required to pay all taxes and an additional $12,000 (down payment) at the beginning of the lease. The lease payments are $720 per month at the end of the month for four years and you know the lease company charges interest at 5.5% compounded monthly.
1. What is the residual value of the car after four years?

ANSWER: __________________________

How much interest do you pay over the life of the lease?

ANSWER: __________________________

How much principal do you pay in the 4h year of the lease?

ANSWER: __________________________

Solutions

Expert Solution

1.
54850.74

2.
14410.74

3.
5459.21

Payment	Loan beginning balance	Payment	Interest payment	Principal payment	Loan ending balance
1	75000	$720.00	$343.75	$376.25	$74,623.75
2	$74,623.75	$720.00	$342.03	$377.97	$74,245.78
3	$74,245.78	$720.00	$340.29	$379.71	$73,866.07
4	$73,866.07	$720.00	$338.55	$381.45	$73,484.62
5	$73,484.62	$720.00	$336.80	$383.20	$73,101.43
6	$73,101.43	$720.00	$335.05	$384.95	$72,716.47
7	$72,716.47	$720.00	$333.28	$386.72	$72,329.76
8	$72,329.76	$720.00	$331.51	$388.49	$71,941.27
9	$71,941.27	$720.00	$329.73	$390.27	$71,551.00
10	$71,551.00	$720.00	$327.94	$392.06	$71,158.94
11	$71,158.94	$720.00	$326.15	$393.85	$70,765.09
12	$70,765.09	$720.00	$324.34	$395.66	$70,369.43
13	$70,369.43	$720.00	$322.53	$397.47	$69,971.95
14	$69,971.95	$720.00	$320.70	$399.30	$69,572.66
15	$69,572.66	$720.00	$318.87	$401.13	$69,171.53
16	$69,171.53	$720.00	$317.04	$402.96	$68,768.57
17	$68,768.57	$720.00	$315.19	$404.81	$68,363.76
18	$68,363.76	$720.00	$313.33	$406.67	$67,957.09
19	$67,957.09	$720.00	$311.47	$408.53	$67,548.56
20	$67,548.56	$720.00	$309.60	$410.40	$67,138.16
21	$67,138.16	$720.00	$307.72	$412.28	$66,725.88
22	$66,725.88	$720.00	$305.83	$414.17	$66,311.70
23	$66,311.70	$720.00	$303.93	$416.07	$65,895.63
24	$65,895.63	$720.00	$302.02	$417.98	$65,477.65
25	$65,477.65	$720.00	$300.11	$419.89	$65,057.76
26	$65,057.76	$720.00	$298.18	$421.82	$64,635.94
27	$64,635.94	$720.00	$296.25	$423.75	$64,212.19
28	$64,212.19	$720.00	$294.31	$425.69	$63,786.50
29	$63,786.50	$720.00	$292.35	$427.65	$63,358.85
30	$63,358.85	$720.00	$290.39	$429.61	$62,929.24
31	$62,929.24	$720.00	$288.43	$431.57	$62,497.67
32	$62,497.67	$720.00	$286.45	$433.55	$62,064.12
33	$62,064.12	$720.00	$284.46	$435.54	$61,628.58
34	$61,628.58	$720.00	$282.46	$437.54	$61,191.04
35	$61,191.04	$720.00	$280.46	$439.54	$60,751.50
36	$60,751.50	$720.00	$278.44	$441.56	$60,309.95
37	$60,309.95	$720.00	$276.42	$443.58	$59,866.37
38	$59,866.37	$720.00	$274.39	$445.61	$59,420.75
39	$59,420.75	$720.00	$272.35	$447.65	$58,973.10
40	$58,973.10	$720.00	$270.29	$449.71	$58,523.39
41	$58,523.39	$720.00	$268.23	$451.77	$58,071.63
42	$58,071.63	$720.00	$266.16	$453.84	$57,617.79
43	$57,617.79	$720.00	$264.08	$455.92	$57,161.87
44	$57,161.87	$720.00	$261.99	$458.01	$56,703.86
45	$56,703.86	$720.00	$259.89	$460.11	$56,243.75
46	$56,243.75	$720.00	$257.78	$462.22	$55,781.54
47	$55,781.54	$720.00	$255.67	$464.33	$55,317.20
48	$55,317.20	$720.00	$253.54	$466.46	$54,850.74

jeff jeffy answered 1 year ago

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