Leaseing a car vs. buying

Question

You must decide whether to buy a new car for $22,000 or lease the same car over a three-year period. Under the terms of the lease, you can make a down payment of $1000 and have monthly payments of $150. At the end of the three years, the leased car has a residual value (the amount you pay if you choose to buy the car at the end of the lease period) of $13,000. Assume you can sell the new car at the end of the three years at the same residual value. Is it less expensive to buy or to lease

Answer 1

Lease for 3 years: 1000 + 150(36), $6,400

Buy: 22,000 - 13,000 = $9,000