Logic, Resolution Making, and Introduction to Statistics
ALL questions beneath concerning BUYING and LEASING a automobile should be answered. Present ALL step-by-step calculations, spherical your entire last worth solutions appropriately to the closest cent, and embrace the items of measurement. Submit this modified Reply Type within the Unit three IP Submissions space.
Being well-informed, or at the least realizing the suitable inquiries to ask, can prevent from being taken benefit of. The acquisition of a automobile entails so many variables that it’s best to have some understanding earlier than you try to buy a automobile. There are much more variables to contemplate once you lease a automobile. For the aim of this instance, you’ll ignore things like tax and vendor rebates. Analysis the variations between shopping for and leasing a automobile.
BUYING
1. Select a automobile that you simply want to personal, and discover the value of this automobile. For this instance, solely take into account new vehicles to buy from a dealership. This will likely be your principal worth, P.
| Principal, P | $ |
2. Analysis accessible rates of interest on this explicit automobile. This would be the fee, r.
| Price in decimal kind, r |
three. Determine how lengthy you wish to take to repay this automobile. Select inside 2 to five years. This would be the time, t.
| Time, t |
four. The easy curiosity formulation, , can let you know how a lot curiosity will likely be added to the principal quantity of this mortgage. Calculate the curiosity in your mortgage.
| Curiosity, I | $ |
Present your work right here:
5. How a lot will you be repaying over the lifetime of your mortgage?
| Complete reimbursement | $ |
Present your work right here:
6. How a lot are your month-to-month funds?
| Month-to-month funds | $ |
Present your work right here:
7. Assume that you’ve got 6% to make use of as a down cost based mostly on the unique buy worth of the automobile. How a lot will you be placing down? What’s the new worth of P in your lease?
| Down cost, D | $ |
| New worth, P | $ |
Present your work right here:
eight. With the down cost, what’s going to the brand new month-to-month funds be?
| New month-to-month cost | $ |
Present your work right here:
LEASING
Now, take into account the choice to lease this similar automobile.
9. The attraction of a lease is a decrease rate of interest. Subtract three% from the unique rate of interest (from Step 2). In case your reply is lower than zero.6%, use the minimal fee of zero.6%.
| Lowered fee in decimal kind, r |
10. The size of a lease is often three–7 years. Select how lengthy you want to lease this automobile.
| Lease time, t |
11. The month-to-month cost on a lease accounts for the depreciation of the automobile’s worth. Assume that on the finish of your lease, the automobile has solely retained 40% of its authentic worth (40% of your reply in Step 1). What’s your automobile’s worth on the finish of the lease? Use this in your new worth of P.
| New worth, P | $ |
Present your work right here:
12. How a lot curiosity will you be paying over the course of this lease?
| Curiosity, I | $ |
Present your work right here:
13. What’s your whole value—in different phrases principal plus curiosity?
| Complete Value | $ |
Present your work right here:
14. How a lot is your month-to-month cost?
| Month-to-month cost | $ |
Present your work right here:
15. On the finish of the lease, you don’t personal the automobile. For those who want to buy the automobile, you’d nonetheless owe the worth of P from Step 11. At this level, you possibly can flip within the keys and stroll away, assuming the automobile is in good situation and ignoring mileage charges. What are the advantages and drawbacks to strolling away from this automobile?
Clarify your reply right here:
16. As a substitute of strolling away, you possibly can additionally buy the automobile for what it’s now price, plus the curiosity. Utilizing P from Step 11, r from Step 2, and t from Step three, calculate how a lot you’d repay over the course of this new mortgage.
| Curiosity | $ |
| Complete reimbursement | $ |
Present your work right here:
17. On the finish of the lease, how a lot did you pay in whole for the automobile? Make sure to embrace the lease, Step 13, together with the acquisition worth from Step 16.
| Complete value of the automobile | $ |
Present your work right here:
18. Would you take into account leasing a automobile? Focus on the benefits and drawbacks of shopping for versus leasing a automobile.
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