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10. The MSRP of a new Honda Civic is $21.500. Kate has decided to lease the car over 4 years. She will make a down payment of

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Answer #1

Present Value = 21,500 - 3,000 = $18,500

Time Period = 4 years

Interest rate = 3%

Monthly payment = $265

Calculating residual payment,

Using TVM Calculation,

FV = [PV = 18,500, PMT = -265, N = 48, I = 0.03/12]

FV = $7,358.80

Residual Payment = $7,358.80

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