Answer: $312.06
Explanation:
We are given that :
MSRP = $17500 , time = 36 months , interest rate = 9% , residual value = 57%
Exact residual value = 57% of 17,500 = $9975
Also, we know Money factor = rate ÷ 2400
money factor = 0.00375
Step 1 : To calculate monthly depreciation by using the formula :
Monthly Depreciation: MSRP-RESIDUAL VALUE / No. of MONTHS
17500-9975 / 36 = $209.03
Step 2 : To calculate monthly financial charge by using the formula :-
Monthly financial charge=( MSRP + RESIDUAL VALUE) . MONEY FACTOR.
Monthly financial charge = (17500+ 9975) . 0.00375= $103.031 25
Step 3 : To calculate lease amount by using the formula :
Lease payment = Depreciation + Financial charge
Lease payment = 209.03 + 103.031 25= 312.06
So, the approximate lease payment is $312.06
