Question

In: Finance

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

  1. 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: __________________________

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

ANSWER: __________________________

  1. 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 2 years ago
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