After deciding to buy a new car you can either lease the

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Reference no: EM13380745

After deciding to buy a new car , you can either lease the car or purchase it with three-year loan. The car you wish to buy costs $38,000. The dealer has a special leasing arrangement where you pay $1 today loans $250 per month for the next three years. Uf you purchase the car , you will pay it off in monthly payments over the next three years at an 8 percent APR. You believe that you will be able to sell the car for $26,000 in three years, should you buy or lease the car? What break-even resale price in three years will make you indifferent between buying and leasing?

Reference no: EM13380745

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