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What is the present value of financing option

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Reference no: EM132505576

Jessica and Bill would like you to know if they should lease or finance their next car. They change their car every 4 years.

Finance Option:
MSRP: $45,000
Interest Rate: 2%
Inflation Rate: 3%
Down Payment: 20%
Residual Value: $20,000

Lease Option:
Lease Payment: $600
Due at Leasing: $1,200

What is the present value of financing option?

Reference no: EM132505576

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