Question

A car dealer is willing to lease you a car for $319 a month for 60 months. Payments are due on the first day of each month starting with the day you sign the lease contract. If your cost of money is 4.9 percent, compounded monthly, what is the current value of the lease

Answer 1

Answer:

$17,014.35

Explanation:

For this question we use the PV function that is presented on the attachment

Data provided in the question  

Future value = $0

Rate of interest = 4.9%  ÷ 12 months = 0.40833%

NPER = 60 months

PMT = $319

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after solving this, the current value of the lease is $17,014.35