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    Computing Monthly Lease Payment

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    You are thinking about leasing a car. The purchase price of the car is $33000. The residual value (the amount you could pay to keep the car at the end of the lease) is $15000 at the end of 36 months. Assume the first lease payment is due one month after you get the car. The interest rate implicit in the lease is 6.75 APR, compounded monthly. What will be your lease payment for a 36 month lease?

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    APR 6.75%
    Monthly interest 0.005625
    Cost $33,000
    Residual value $15,000
    Monthly lease payment ...

    Solution Summary

    This solution involves computing monthly lease payment in Excel.