Question

Ralph is leasing a $32,000 car for 36 months. The terms of his lease include an 8. 5% interest rate (money factor of 0. 00354) and a residual value of 72%. Determine Ralpha's approximate monthly lease payment. A. $145. 00 b. $230. 40 c. $248. 89 d. $443. 73.

Answer 1

Based on the information given Ralpha's approximate monthly lease payment is d. $443. 73.

Residual value=$32,000×72%

Residual value=$23,040

Depreciation=$32,000-$23,040

Depreciation=$8,960

Base monthly lease payment=$8,960/36

Base monthly lease payment=$248.89

Interest per month=($32,000+$23,040)×0.00354

Interest per month=$55,040×0.00354

Interest per month=$194.84

Monthly lease payment=$248.89+$194.84

Monthly lease payment=$443.73

Inconclusion Ralpha's approximate monthly lease payment is d. $443. 73.

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