name: \nassignment: buying vs leasing a car (show your work)\nprob 1.\nchelsea is considering buying a…

name: \nassignment: buying vs leasing a car (show your work)\nprob 1.\nchelsea is considering buying a sports coupe. she has two purchasing options: a lease payment of $110 per month for 3 years or a loan payment of $700 per month for 5 years.\ndoes it cost more to pay the loan amount over 7 years or to lease it for 3 years?\nprob 2.\ncar amortization table\nthe amortization table shows payment breakdowns for a car loan for $20,000.\nmonth payment interest principal remaining balance\n1 $368.33 $66.67 $301.66 $19,698.34\n2 $368.33 $65.66 $302.67 $19,395.67\n3 $368.33 $64.65 $303.68 $19,091.99\n4 $368.33 $63.64 $304.69 $18,787.30\n5 $368.33 $62.62 $305.71 $18,481.59\n6 $368.33 $61.61 $306.72 $18,174.87\nwhat is the interest amount paid in the first 4 months?

name: \nassignment: buying vs leasing a car (show your work)\nprob 1.\nchelsea is considering buying a sports coupe. she has two purchasing options: a lease payment of $110 per month for 3 years or a loan payment of $700 per month for 5 years.\ndoes it cost more to pay the loan amount over 7 years or to lease it for 3 years?\nprob 2.\ncar amortization table\nthe amortization table shows payment breakdowns for a car loan for $20,000.\nmonth payment interest principal remaining balance\n1 $368.33 $66.67 $301.66 $19,698.34\n2 $368.33 $65.66 $302.67 $19,395.67\n3 $368.33 $64.65 $303.68 $19,091.99\n4 $368.33 $63.64 $304.69 $18,787.30\n5 $368.33 $62.62 $305.71 $18,481.59\n6 $368.33 $61.61 $306.72 $18,174.87\nwhat is the interest amount paid in the first 4 months?

Answer

Explanation:

Prob 1:

Step1: Calculate lease - total cost

The lease payment is $100 per month for 3 years. There are $3\times12 = 36$ months. So the total lease cost is $100\times36=$3600$.

Step2: Calculate loan - total cost

The loan payment is $700 per month for 5 years. There are $5\times12=60$ months. So the total loan cost is $700\times60 = $4200$. Since $4200>3600$, it costs more to pay the loan amount over 5 years.

Prob 2:

Step1: Identify interest amounts for first 4 months

From the amortization table, the interest amounts for month 1, 2, 3 and 4 are $66.67$, $65.66$, $64.65$ and $63.64$ respectively.

Step2: Sum up the interest amounts

The sum of the interest amounts is $66.67 + 65.66+64.65 + 63.64=$260.62$.

Answer:

Prob 1: It costs more to pay the loan amount. Prob 2: $260.62$