Please someone help me with this problem?

Question

Given below are lease terms at the local dealership. What is the total cash due at signing?

Terms:
? Length of lease = 24 months
? MSRP of the car = $17,500
? Purchase value of the car after lease = $9900
? Down payment = $2400
? Monthly payment = $425
? Security deposit = $375
? Acquisition fee = $500
A. $3700
B. $3275
C. $3400
D. $375

Answer 1

When you buy a car you don't pay the monthly payments at the start.  In addition you don't care how much the buy-out is when the lease is done, that's for after you have had it for two years.

 

You do need to worry about the down payment, that is your good faith obligation to the lease of the car.  In addition, you may need to pay a security deposit based on your credit, and the acquisition fee is what you would pay a broker or dealer to get the car to you if you wanted one from a different location.

 

Therefore 2400 + 375 + 500 = 3275