Lease the car or purchase it with a two-year loan

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After deciding you want a new car, you can either lease the car or purchase it with a two-year loan. The car you want costs $34,000. The dealer has a special leasing arrangement where you pay $97 today and $497 per month for the next two years. If you purchase the car, you will pay it off in monthly payments over the next two years at an APR of 6 percent. You believe that you will be able to sell the car for $22,000 in two years. What is the present value of purchasing the car?

In spreadsheet:

PV of resale Price?

PV of Purchase?

PV of lease payments?

PV of resale price at breakeven?

Breakeven resale Price?

Reference no: EM131020169

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Lease the car or purchase it with a two-year loan : After deciding you want a new car, you can either lease the car or purchase it with a two-year loan. The car you want costs $34,000. The dealer has a special leasing arrangement where you pay $97 today and $497 per month for the next two years. If yo..
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