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?

## Step 1: Calculate the total cost of Plan A<br />### Plan A involves a down payment of $5000 and 48 monthly payments of $435. The total cost is the sum of the down payment and the total of the monthly payments. Total cost = $5000 + (48 \times \$435) = \$5000 + \$20880 = \$25880$.<br /><br />## Step 2: Calculate the total cost of Plan B<br />### Plan B has no down payment, only 48 monthly payments of $550. The total cost is simply the total of the monthly payments. Total cost = $48 \times \$550 = \$26400$.<br /><br />## Step 3: Analyze when to choose Plan A<br />### Choose Plan A if you can afford the higher initial down payment and prefer a lower overall cost in the long run. Plan A is less expensive overall by $26400 - $25880 = $520$.<br /><br />## Step 4: Analyze when to choose Plan B<br />### 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.