it by financing the amount from a bank.
A car salesman at the showroom gave her the following table illustrating the comparison of the lease vs. finance options for the car she liked.
Description
Leasing the car
Financing the car
Manufacturer's Suggested Retail Price(MSRP) Additional purchase costs* 13% HST Net price Down payment Term in months
$21,500.00
$21,500.00
$1,817.00
$1,817.00 $3031.21 $23,317.00 $26,348.21 $2000.00 $2000.00 48 48 $250.00+13% HST $562.13 (month-beginning payments) (month-end payments) $12,453.56 + 13% HST Nil
Monthly payments Residual payment to own
Assume that money was worth 5.5% compounded annually. a. Which option would be economically better for Tamera?