Justine Decides to Enter into a 6-Year Car Lease Agreement

question 26

Multiple Choice

Justine decides to enter into a 6-year car lease agreement.The purchase price of the car is $24,995,and the expected residual value after 5 years is $9,500.If there is no risk of default and the risk-free rate is 7% APR with monthly compounding,what is the monthly lease payment for a 6-year lease in a perfect capital market?

• A)$215.21
• B)$423.67
• C)$317.74
• D)$319.59
• E)$347.51

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