Jess is considering leasing a pickup truck for $24,950 plus taxes. The lease would be for 3 years with a down payment of $2,250 and an interest rate of 8.75%. To calculate the monthly lease payment and total cost of the lease, the residual/buyout value of the truck is set at 48% of the new price. Jess is also considering buying the truck at the end of the lease term with a 2 year loan.

1. Interested in
leasing something
a little different?
Yellow Car! Smack! Kiss!
by flickr user orangeacid

2. Jess wants to buy a 4 x 4 pickup truck for $24 950.00 plus PST (7%) and
GST (5%). She will use her present small car as a trade, and will receive
$5 200.00 trade-in value. She will make a $3000 down payment, and pay
for the balance of the cost of the vehicle with a loan. The loan interest rate
is 8.75%, and must be repaid in 3 years.
What are her monthly payments and what is the total cost of the truck?
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