5
QuizMultiple Choice

Credit and Loans — Test

Question 5 • Personal Finance

Jennifer is leasing a car from a local auto retailer. The terms of the lease include a 9% interest rate for 36 months with a residual value of 57% The MSRP for the car Jennifer is leasing is 17 dollars comma 500 What will Jennifer’s monthly lease payment be?

Answer
A
93 point 8 4 dollars
B
99 point 7 5 dollars
C
209 point 0 3 dollars
D
312 point 0 6 dollars

Explanation

The residual value is 57% of $17,500, or $9,975. The monthly depreciation charge is ($17,500 − $9,975) ÷ 36 = about $209.03. For the finance charge, convert the 9% annual rate to a lease money factor: 0.09 ÷ 24 = 0.00375; then ($17,500 + $9,975) × 0.00375 = about $103.03. Adding the two charges gives $312.06 per month, choice D.

AI-written and checked against the verified answer.

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