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'1. You sign the following lease agreement for a new car; i $235 per month 0 $2505 clown payment It $850 height charge 0 $2?5 security 0 15% taxes [on all of above except the security deposit} a. How much cash will you need upon signing the agreement? {2 marks} I}. If the lease is for 4 years, calculate the total amount {including the start—up costs} you will have to pay over the lease agreement. He sure to include 15% lanes on each monthly payment. {5 marlcs) 2. This exercise will lead you through calculating the costs inuotyecl in purchasing the samecar as in question 1 above. Purchase Price: S1? 30:] Down Payment 52505 Balance to be ?nanced at 1.9% interest over 3 years, compounded monthly Freight and FDI: $850 Air Conditioning Tax: $10!] Administration Fee: $85 a. Calculate the total cost of the car. including (15%) taxes. (5 marks) [1. Calculate the total amount to be ?nanced by subtracting the down payment from the total cost of the vehicle. and then using the compound interest formula A = PH + i)". {3 marks} c. Calculate how much the car will actually cost by adding the amount to be ?nanced in part b to the down payment. {2 marks} :1. Calculate the monthly payments using: [1+é}"—1 W=PMT where Ft." is the amount from bI PMT is what you are solvingI F is the interest rate per payment period, and n is the number at compounding periods in a year times the numberot' years. [4 marks}

3. Compare the total amounts required for the situations in questions 1 and 2. 3. Which method costs more overall? (1 mark) h. Which method has the highest monthly payments? {1 mark) (3. State the advantages and disadvantages of both? (4 marks}