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.

Answer 1

C is the correct answer on Edgen.

Explanation:

a.0.00033

b.0.00192

c.0.00333

d.0.01920

Answer 2

money factor is an alternative way in solving leasing problems. money factor can be converted to annual percentage rate ( APR) and vice versa.

APR = 2400 x money factor
so money factor can be solve using
money factor = APR / 2400
money factor = 8% / 2400
money factor = 0.0033333