Find the interest rate the car dealership is charging

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Reference no: EM131202320

A car dealership offers a lease on an $18000 car. The lessee will pay $2000 down and $200 per month for 36 months. He then has the option to purchase the car for $13000. Instead, he could borrow from a bank the $16000 at 6.5% compounded monthly. Assuming his payments to the bank will also be $200 per month for 36 months, answer each of the following: (He will not be paying off the bank loan in 36 months, but will still owe money. Use N=36 for each.) a) Find the interest rate the car dealership is charging. b) What is the total amount paid to the car dealership in the lease agreement? How much of this is interest? c) How much is still owed on the bank loan at the end of 36 months? d) How much of the 37th payment to the bank would be interest?

Reference no: EM131202320

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