Business, 22.02.2020 03:52 millerbe1228

After deciding to acquire a new car, you can either lease the car or purchase it with a two-year loan. The car you want costs $33,000. The dealer has a leasing arrangement where you pay $95 today and $495 per month for the next two years. If you purchase the car, you will pay it off in monthly payments over the next two years at an APR of 5 percent. You believe that you will be able to sell the car for $21,000 in two years. What break-even resale price in two years would make you indifferent between buying and leasing?

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