Question

Bob is thinking about leasing a car. The lease comes with an interest rate of 8%. Determine the money factor that will be used to calculate Bob’s payment. A. 0. 00033 b. 0. 00192 c. 0. 00333 d. 0. 1920.

Answer 1

The money factor will be used to calculate Bob’s payment is 0.0033.

Given

Bob is thinking about leasing a car.

The lease comes with an interest rate of 8%.

How to calculate the money factor?

The money factors can be converted to interest rates by multiplying by 2,400.

In the same vein, if the car dealer uses an interest rate, this can be converted to a money factor by dividing by 2,400.

$\rm APR = 2400 \times money\ factor\\\\Money \ factor = \dfrac{ARP}{2400}$

Therefore,

The money factor will be used to calculate Bob’s payment is;

$\rm APR = 2400 \times money\ factor\\\\Money \ factor = \dfrac{ARP}{2400}\\\\Money \ factor = \dfrac{0.08}{2400}\\\\Money \ factor =0.0033$

Hence, the money factor will be used to calculate Bob’s payment is 0.0033.

To know more about the Money factor click the link given below.

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