Question

Tim needs a new car while he attends college in the United States for the next three years. The car he would like
has an MSRP of $15,000. A local dealer can get him a three-year loan with a 7% interest rate if Tim can make a
$1,500 down payment.
The same dealer offers the same car for lease with a money factor of 0.00271 and a residual value of 75%. The
lease requires an additional fee of $1,250 to cover Tim's security deposit and the acquisition and documentation
fees for the car.
Tim is looking to drive the car home with the smallest monthly payment. Which of the following statements is true?
a.
The monthly payment for the loan is lower.
b. The monthly payment for the lease is lower.
C.The monthly payments for the lease and loan are the same.
d. You cannot compare the monthly payments for leases and loans.

Answer 1

Answer:

The answer you would be looking for is actually A.

Step-by-step explanation:

I just got an 100% on edge

Answer 2

Since Tim is looking at driving the car home with the smallest monthly payment. Which of the following statements is true?

a. The monthly payment for the loan is lower.

Let's understand what leasing is all about.

What Is Leasing?

Leasing refers to the act of renting out an asset to someone after a contract outlining the terms has been agreed upon.

As a local dealer will be leasing out the car to Tim, Tim paying an additional $1,250 to cover the security deposit and the acquisition and documentation fees for the car will enable him get the car and go home with the smallest monthly payment.

The monthly payments on a lease are known to be usually lower. They are lower the monthly finance payments you spend on purchasing the same car. So, Tim getting the lease, he is actually paying to drive the car, and not actually to buy it.

Learn more about leasing on https://brainly.com/question/24460932