Use of Financial Calculator TI BA II Plus Required

question 78

Multiple Choice

Use of Financial Calculator TI BA II Plus required. Tom needs a car to commute to work and has found a suitable Honda Civic from a dealer for $8000. He has $3000 saved for it and can afford a monthly payment up to $250. Which of the following is the best (lowest coat) financing option for him ?

• A)Take a three year lease which requires a $1,000 deposit and monthly payments of $219. They offer a $1,000 lease buy out option at the end, which guarantees he can purchase the car for $1,000.
• B)Make a $3,000 deposit and take a two year loan with monthly payments of $221.
• C)Make a $2,000 deposit and take a three year loan with monthly payments of $185.
• D)Make a $1,000 deposit and take a three year loan with monthly payments of $210.

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