Question

We make two assumptions in here 1) The rate of return or interest rate is 8%...

We make two assumptions in here 1) The rate of return or interest rate is 8% annually. 2) The appraised value of Toyota Corolla at the end of 3rd year is $16,000. Option A: Buy Toyota Corolla for $8,000 down payment and make monthly mortgage payment of $360 for 3 years (or 36 months) Option B: Lease Toyota Corolla for monthly $240 for 3 years. a) By using AW method, choose the better option. b) By using PW method, choose the better option. c) By using FW method, choose the better option. 4. Use excel built-in function to find the effective interest rate. nominal Compounded effective 12% Semi-annually 12% Quarterly 12% Monthly 12% Weekly 12% Daily

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