General Motors advertised three alternatives for a 25-month lease on a new Blaze

Question

General Motors advertised three alternatives for a 25-month lease on a new Blazer: (1) zero dollars down and a lease payment of $1,750 per month for 25 months, (2) $5,000 down and $1,500 per month for 25 months, or (3) $38,500 down and no payments for 25 months. (Use Table B.3)

Calculate the total present value of lease payments under the three alternatives (assume the annual interest rate is 12% compounded monthly). (Round "PV Factor" to 4 decimal places and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Total present value

Option 1 = $

Option 2 = $

Option 3 = $

Indicate which is the best alternative (assume you have enough cash to accept any alternative).

Option 1

Option 2

Option 3

Explanation / Answer

Option 2

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