Can you help me with this university finance question? pv fv etc...?
9. chris wants to buy a new car, a volkswagen jetta (because it comes good
ly equipped
for under $25,000). assume the purchase price is indeed $25,000 +pst +gst, and
assume that chris needs no downpayment. volkswagen offers a finance rate of 3.9%
for a 60 month term. alternatively, you can lease the car for a monthly rate of $399
(including all taxes).
(a) what is your monthly payment for the financing option?
(b) assuming chris keeps the terms of the lease (w.r.t. milage etc.) and keeps the
car in good condition, so that there will be no extra costs at the end of his
term. further, assume that over these 60 months he can invest at the rate
of 2.6%. how much does chris’s car have to be worth in 60 months time so
that it is
better for him to have bought the car instead of leasing it?
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note, pst + gst are taxes and together amount to 14%.
help me.