Jack decides to buy a car. He can either lease the car or purchase it with a thr

Question

Jack decides to buy a car. He can either lease the car or purchase it with a three year loan. The car he wishes to buy costs $45,000. The dealer has a special leasing arrangement where he pays $1 today and $650 per month at the beginning of each month for the next three years. If he purchases the car, he will pay it off in monthly payments over the next three years at an 10% percent annual percentage interest rate (APR) with monthly compounding. He also believes that he will be able to sell the car for $30,000 in three years.
Question 1: What

Explanation / Answer

Answer is E.

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