1) You must decide whether to buy a new car for $28,000 or lease the same car over a three-year period

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1) You must decide whether to buy a new car for $28,000 or lease the same car over a three-year period. Under the terms of the lease, you make a down payment of $2000 and have monthly payments of $350. At the end of three years, the leased car has a residual value (the amount you pay if you choose to buy the car at the end of the lease period) of $15,000. Assume you sell the new car at the end of three years at the same residual value. Compare the cost of leasing and buying the car.

1.Buy $13,000, lease $14,900

2.Buy $14,000, lease $14,600

3.Buy $13,000, lease $14,300

4.Buy $13,000, lease $14,600

2.Use the compound interest formula for compounding more than once a year to determine the accumulated balance after the stated period.

$5000 deposit at an APR of 5% with monthly compounding for 6 years

1.$5396.07

2.$5126.31

3.$40,418.12

4.$6745.09

3.Provide an appropriate response.

True or False? If you deposit $5,000 in an in investment account today, it can double in value to   in just a couple decades even at a relatively low interest rate (6-8%).

1.True

2.False