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Jessica is considering taking out a 3-year lease on a new car. The total price of...

Jessica is considering taking out a 3-year lease on a new car. The total price of the car would be $35,000 and the residual value is $29,000. Calculate her monthly lease payment assuming a 5.2% interest rate.

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Answer #1

Lease payment = depreciation fee + finance fee

Depreciation fee = (net capitalised cost - residual value) ÷ (lease term)

Net capitalised cost = $35000

Residual value = $29000

Lease term = 36 months

Depreciation fee = ($35000 - $29000) ÷ 36 months

= $6000 ÷ 36 months = $166.67 per month

Monthly lease payment = $166.67

These are all the information required to solve the above given question.

if there is any clarification required regarding the above provided answer, please mention them in comment box.

I hope, all the above mentioned information and explanations are useful and helpful to you.

Thank you.

Finance fee = (net capitalised cost + residual value) × money factor

Money factor = interest rate ÷ 36 = 5.2% ÷ 2400 = 0.00216

Money factor = 0.14

Finance fee = ($35000 + $29000) × 0.00216

= 138.67

Monthly lease payment = $166.67 + $138.67

= $305.34

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