21
QuizMultiple Choice

Credit and Loans — Test

Question 21 • Personal Finance

The depreciation component of a lease payment is _____.

Answer
A
the sum of your first and final lease payments, designed to make driving the car off the lot more affordable
B
to compensate the leasing company for the monetary value the car loses during your lease
C
an additional amount added to the value of the car to say “thank you” to the lease company for their services
D
interest you pay on the money the lease company has invested in your car during your lease

Explanation

During a lease, the car loses value as it ages and is driven. The depreciation component compensates the leasing company for that decrease in the car’s value during your lease, so the correct choice is “to compensate the leasing company for the monetary value the car loses during your lease.” Interest on the money invested is a separate part of a lease payment.

AI-written and checked against the verified answer.

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