W 9 WORKSHEET Worksheet for the Lease versus Purchase Decision Cost of Purchasin

ID: 2726490 • Letter: W

Question

W 9 WORKSHEET Worksheet for the Lease versus Purchase Decision Cost of Purchasing a. Agreed-upon purchase price b. Down payment c. Total loan payments (monthly loan payment x ___ no. months) d. Opportunity cost of down payment [line b x (1 + foregone rate of return (number of years))] e. Less: Expected market value of the car ar the end of the loan f. Total cost of purchasing $0 Cost of Leasing g. Down payment (capitalized cost reduction) + security deposit h. Total lease payments (monthly lease payment x ___ no. months) i. Opportunity cost of total initial payment [line g x (1 + foregone rate of return(number of years))] j. Any end-of-lease charges (e.g., excess mileage), if applicable k. Less: Refund of security deposit l. Total cost of leasing $0 $0 W 9 WORKSHEET Worksheet for the Lease versus Purchase Decision Cost of Purchasing a. Agreed-upon purchase price b. Down payment c. Total loan payments (monthly loan payment x ___ no. months) d. Opportunity cost of down payment [line b x (1 + foregone rate of return (number of years))] e. Less: Expected market value of the car ar the end of the loan f. Total cost of purchasing $0 Cost of Leasing g. Down payment (capitalized cost reduction) + security deposit h. Total lease payments (monthly lease payment x ___ no. months) i. Opportunity cost of total initial payment [line g x (1 + foregone rate of return(number of years))] j. Any end-of-lease charges (e.g., excess mileage), if applicable k. Less: Refund of security deposit l. Total cost of leasing $0 $0

Explanation / Answer

Note: Figures are self assumed as directed by you in the comment :

WORKSHEET

Worksheet for the Lease versus Purchase Decision

Cost of Purchasing

Agreed-upon purchase price

$100,000.00

Down payment

$ (20,000.00)

Total loan payments (monthly loan payment $ 2000 x 60 no. months)

$120,000.00

Opportunity cost of down payment [line b x

(1 + foregone rate of return (number of years))] = 20000*(1+10%)^5

$ 32,210.20

Less: Expected market value of the car ar the end of the loan

$ (15,000.00)

Total cost of purchasing

$137,210.20

Cost of Leasing

Down payment (capitalized cost reduction) + security deposit

$ 12,000.00

Total lease payments (monthly lease payment x ___ no. months) = $1500*60 Months =

$ 90,000.00

Opportunity cost of total initial payment [line g x

(1 + foregone rate of return(number of years))] = 12000*(1+10%)^5 =

$ 19,326.12

Any end-of-lease charges (e.g., excess mileage), if applicable

$ 500.00

Less: Refund of security deposit

$ (5,000.00)

Total cost of leasing

$116,826.12