Question

You have a choice of whether to lease or buy a location. You can lease it for $3,500 per month or buy it for $1 million. A bank will give you a mortgage at 4% per year. How will your monthly mortgage interest compare to the monthly lease cost?

Answer 1

Answer:

monthly mortgage interest is less than monthly lease cost

Explanation:

4% of 1000000

= $40,000 per year

Per month: 40000/12

= %3,333.33

Monthly mortgage interest is less than monthly lease cost

Answer 2

Answer:

Monthly mortgage interest is less than monthly least cost.

Explanation:

4% of 1,000,000

= $40,000 per year

Per month = 40,000 ÷ 12

= %3,333.33