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Annuities Question 5: You are leasing a new BMW 228i. You found you can lease one in Los Angeles for $449 a month for 36 mont
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(5) Monthly Lease Payments = $ 449, Down payment = $ 4499 and Tenure = 36 months

Total Payments made under lease = 449 x 36 + 4499 = $ 20663

(6) Interest Rate = 4.8 % per annum or (4.8/12) = 0.4 % per month

Therefore, PV of Lease Payments = 449 x (1/0.004) x [1-{1/(1.004)^(36)}] + 4499 = $ 19525.18

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