What is the present value of purchasing the car

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Reference no: EM13987977

After deciding to buy a new car, you can either lease the car or purchase it on a two-year loan. The car you wish to buy costs $33,000. The dealer has a special leasing arrangement where you pay $95 today and $495 per month for the next two years. If you purchase the car, you will pay it off in monthly payments over the next two years at a 5 percent APR. You believe you will be able to sell the car for $21,000 in two years.

What is the present value of purchasing the car?

Reference no: EM13987977

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