Question

Given the lease terms below, find the total lease cost, assuming that the deposit is nonrefundable.

Terms:

Length of lease: 36 months
MSRP of the car: $21,400
Purchase value of the car after lease: $17,100
Down payment: $1500
Monthly payment: $272
Security deposit: $350
Acquisition fee: $700
a. $11,100

b. $12,342

c. $14,678

d. $9246

Answer 1

The total lease cost, including the nonrefundable down payment and acquisition fee, combined with the monthly payments over the 36-month lease term, is $11,992.

Step-by-step explanation:

To find the total lease cost for a car, we need to consider all the payments made during the term of the lease plus any nonrefundable upfront fees. The given terms are:

• Length of lease: 36 months
• Monthly payment: $272
• Down payment: $1,500 (nonrefundable)
• Security deposit: $350 (typically refundable, hence excluded from total lease cost)
• Acquisition fee: $700 (nonrefundable)

First, we multiply the monthly payment by the length of the lease:

$272 per month
×
36 months = $9,792

Then, we add the nonrefundable fees:

$9,792 total payments + $1,500 down payment + $700 acquisition fee = $11,992

This is the total lease cost, assuming the security deposit is refundable and not included in the final cost.