Jennifer is leasing a car from a local auto retailer. The terms of the lease include a 9℅ interest rate for 36 months with a residual value of 57℅. The MSRP for the car Jennifer is leasing is $17,500. What will Jennifer's monthly lease payment be? a. $93.84 b. $99.75 c. $209.03 d. $312.06
Answer:
The correct answer is D. $312.06
Step-by-step explanation:
We are given that :
MSRP = $17500 , time = 36 months , interest rate = 9% , residual value = 57%
Exact residual value = 57% of 17,500 = $9975
Also, we know Money factor = rate ÷ 2400
⇒ money factor = 0.00375
Step 1 : To calculate monthly depreciation by using the formula :
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Step 2 : To calculate monthly financial charge by using the formula :
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Step 3 : To calculate lease amount by using the formula :
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So, the approximate lease payment is $312.06