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A used car that currently costs $20,000 will have a market value of $3,000 in four years. As a student, you cannot afford to pay $20,000, but you want to have a car while you are going to university for the next four years. Your father agrees to lend you $20,000 on the condition that you pay him $300 at the end of every month for the next four years and $20,000 at the end of the four years. The car dealer provides financing facilities, and you are qualified to get a lease for which you will have to make monthly, end-of-month payments of $650 for 48 months. (For calculation purposes, use 5 decimal places and final answers to o decimal places, e.g. 5,275.) Calculate the PV of lease. PV of lease Calculate the PV of loan from father, PV of loan from father Which option will leave you better off, assuming your cost of capital is 6 percent? You should take A used car that currently costs $20,000 will have a market value of $3,000 in four years. As a student, you cannot afford to pay $20,000, but you want to have a car while you are going to university for the next four years. Your father agrees to lend you $20,000 on the condition that you pay him $300 at the end of every month for the next four years and $20,000 at the end of the four years. The car dealer provides financing facilities, and you are qualified to get a lease for which you will have to make monthly, end-of-month payments of $650 for 48 months. (For calculation purposes, use 5 decimal places and final answers to o decimal places, e.g. 5,275.) Calculate the PV of lease. PV of lease Calculate the PV of loan from father, PV of loan from father Which option will leave you better off, assuming your cost of capital is 6 percent? You should take

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