Business: Your car dealer is willing to lease you a new car for $309 a month for 72 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, what is the current value of the lease

Your car dealer is willing to lease you a new car

nevaehbell30

01.01.2022

PV$19,242.04

Explanation:

We will calculate the present value of an annuity using our cost of capital

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 309

time72

rate 0.004083333 (A)

$309 \times \frac{1-(1+0.0040833)^{-72} }{0.0040833} = PV\\$

PV$19,242.04

This will be the present value of the lease at our capital rate.

Notes

(A)The payment are on a monthly basis, so the interest rate must be monthly to. For that we divide the 4.9 percent which is annual by 12

That way the time and rate are on the same metric.

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vlarocca17

13.02.2022

First blank : the brain

Second blank : the spinal cord

Explanation:

Just completed the assignment on edge : )

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