1) John decides to purchase a car. He can either lease car or buy it with a three year loan. The car he wants to purchase costs= $45,000. Dealer has a special leasing arrangement where he pays $1 today and $650 per month for next 3 years. If he buys the car, he will pay it off in monthly payments over next 3 years at the 10% annual percentage interest rate (APR). He also believes that he will be able to sell car for= $30,000 in 3 years.
What is the present value of total costs if Jack decides to lease car?