Question

Honda is offering you a lease on its new CRV LX 2019 model priced at $25,750, with lease payments of $359 at the start of each month for 36 months with no down payment and an option to buy the vehicle at $15,000 after the lease period. This lease financing is at 3% APR, and you would have paid $Answer (to the nearest $), during the lease.

Answer #1

The total payments made during the lease period should equal the total present value of the beginning of month leade rentals, discounted at the APR of 3 %. The buyout price should not be included in the total payment calculation as it is optional in nature and may or may not be availed.

Monthly Lease Rentals = $ 359, APR = 3 % , Monthly Interest Rate = (3/12) = 0.25 % and Tenure = 36 months

Therefore, Total Lease Payments Made = 359 x (1/0.0025) x [1-{1/(1.0025)^(36)}] x (1.0025) = $ 12375.6

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