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 start

Question

1 year ago

13

ing 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

1 answer:

telo118 [61] · Answer 1 · 2023-08-24T16:45:13+03:00

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