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4. You are looking to lease a car. The dealer offers you the following: Car...

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Finance

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4. You are looking to lease a car. The dealer offers you the following: Car price = $35,000 Monthly lease payments = $499 Down payment = $3,000 Lease term = 36 months Purchase price at end of lease = $18,000 What is the implicit interest rate on the lease? B4 B E F Lease 5.2% A 1 2 Implicit lease rate 3 Cash flows: 4 Start 5 Month 1 6 Month 2 7 Month 3 8 Month 4 9 Months 10 Month 6 11 Month 7 12 Month 8 13 Month 9 14 Month 10 15 Month 11 16 Month 12 17 Month 13 18 Month 14 19 Month 15 20 Month 16 21 Month 17 22 Month 18 23 Month 19 24 Month 20 25 Month 21 26 Month 22 27 Month 23 28 Month 24 29 Month 25 30 Month 26 31 Month 27 32 Month 28 33 Month 29 34 Month 30 35 Month 31 36 Month 32 37 Month 33 38 Month 34 39 Month 35 Prob. 2 Prob. 1 Ready Prob. 3 Prob. 4 Normal View Prob. 5 V. AUG 2021 12 Month 8 13 Month 9 14 Month 10 15 Month 11 16 Month 12 17 Month 13 18 Month 14 19 Month 15 20 Month 16 21 Month 17 22 Month 18 23 Month 19 24 Month 20 25 Month 21 26 Month 22 27 Month 23 28 Month 24 29 Month 25 30 Month 26 31 Month 27 32 Month 28 33 Month 29 34 Month 30 35 Month 31 36 Month 32 37 Month 33 38 Month 34 39 Month 35 40 Month 36 41 42 43

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