To LEASE a vehicle means:
* pay a SET AMOUNT each month, for a predetermined length
* you have the option of quot;PURCHASINGquot; the vehicle at the end of
the lease or leasing again.
If you do choose to purchase the vehicle at the end of the lease, you have
to pay something called the RESIDUAL VALUE of the vehicle, which is
the PREDICTED VALUE of the vehicle at the end of the lease.
LEASE TERM: The length of the lease, usually in months.
LEASE PAYMENT: The monthly payment for a lease, which
SECURITY DEPOSIT: An initial amount that you pay at the
start of a lease and is returned at the
end if there is no damage to the car.
EX A new Escalade in MB runs about $42,900. (including freight) plus taxes. The
monthly lease payment is $382 plus taxes for a 36month lease. For leasing, a down
payment of $4,200 is required. As well a refundable $750 security deposit and
first months payment must be made at the start when the lease is signed. The residual
value is 75%, plus taxes, at the end of the lease if you want to purchase it.
a) Find the total monthly lease payment including taxes.
b) Calculate the total lease payment.
c) Calculate the amount which must be paid at the start of the lease.
d) Find the residual value of the vehicle at the end of the lease.
e) If you bought the Escalade after the lease, what is the total price you would
have paid for it from start to finish?