Question 1164092: A car is leased for 4 years at $279/month.
One month's payment must be made in advance, and a $500 termination fee is charged when the car returned at the end of 4 years.
The same car can be bought for $19,875 cash.
If the car is sold for $8,500 at the end of the 4 years, how much less did buying cost than leasing?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! the car is leased for 4 years at 279 a month.
one month's payment is made in advance and a 500 dollar termination is charged when the care is returned at the end of 4 years.
the same car can be bought for 19,875 cash.
the car is then sold at 8500 at the end of the 4 years.
the lease cost is 12 * 4 * 279, paid at the beginning of each month, plus 500, paid at the end of the last month = 13,892.
the buy cost is 19,875 paid when the car is bought minus 8,500 received when the car is sold = 11,375.
the lease cost minus the buy cost is 13,892 - 11,375 = 2,517.
that's your solution.
buying the car was $2,517 less than leasing the car.
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