The trade-in value of the new car at the end of four years

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Elaine Hodge is doing analysis on lease versus purchase a new Toyota Prius costing $22,000. The 4-year closed-end lease requires an initial payment of $2,700 ($2,200 down payment + $500 security deposit) and monthly payments of $350. Purchasing requires a $3,500 down payment, sales tax of 5% ($1,100), and the remaining balance paid by a 7%, 4 year auto loan. The trade-in value of the new car at the end of 4 years is estimated to be $12,100. Assume your after-tax savings return is 4%.

Reference no: EM131883805

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