7. A dealership offers two lease packages for the same vehicle. Plan A: 5000 down and 48 payments of 435 Plan B: no money down and 48 payments of 550 a) Calculate the total cost of each plan. b) When might you choose Plan A? c) When might you choose Plan B?

Question

7. A dealership offers two lease packages for the same vehicle. Plan A: 5000 down and 48 payments of 435 Plan B: no money down and 48 payments of 550 a) Calculate the total cost of each plan. b) When might you choose Plan A? c) When might you choose Plan B?

Answer 1

### a) Plan A:

26400### b) Choose Plan A if you can afford the $5000 down payment and want the lowest total cost.### c) Choose Plan B if you cannot afford the down payment required for Plan A.

Answer 2

## Step 1: Calculate the total cost of Plan A### Plan A involves a down payment of

435. The total cost is the sum of the down payment and the total of the monthly payments. Total cost =

435) = \

20880 = \

.## Step 2: Calculate the total cost of Plan B### Plan B has no down payment, only 48 monthly payments of

48 \times \

26400

26400 -

520$.## Step 4: Analyze when to choose Plan B### Choose Plan B if you cannot afford the large initial down payment required for Plan A, even though it results in a slightly higher overall cost.

Question

7. A dealership offers two lease packages for the same vehicle. Plan A: 5000 down and 48 payments of 435 Plan B: no money down and 48 payments of 550 a) Calculate the total cost of each plan. b) When might you choose Plan A? c) When might you choose Plan B?

Solution

Answer

Explanation