BUSN 380 Course Great Wisdom / tutorialrank.com BUSN 380 Course Great Wisdom / tutorialrank.com | Page 66

2. Based on the following, calculate the costs of buying and of
leasing a motor vehicle.

Purchase Costs Leasing Costs
Down payment
Loan payment
36 months

$1,500 Security deposit
$450 for 48 months Lease payment

$500
$450 for

Estimated value at
End of loan

$4,000 End of lease charges

$600

Opportunity cost interest rate: 4 percent

3. You can purchase a service contract for all of your major
appliances for $180 a year. If the appliances are expected to last for
10 years, and you earn 5 percent on your savings, what would be the
future value of the amount you would pay for the service contract?
4. You estimate that you can save $3,800 by selling your own home
rather than using a real estate agent. What would be the future value
of that amount if invested for five years at 7 percent?

5. John Walters is comparing the cost of credit to the cash price of an
item. If John makes a $60 down payment, and pays $34 a month for
24 months, how much more would that be than the cash price of
$695?
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