Question

Given the below lease terms at a local car dealership, what is the total cash paid by the end of the lease when at signing the dealership required a down payment, security deposit, acquisition fee at signing and all the monthly payments paid?

Length of lease = 36
months

MSRP of the car = $22,750

Purchase value of the car after lease = $16,900

Down payment = $1,800

Monthly payment = $475

Security deposit = $375

Acquisition fee = $300
$17,100
$19,575
$2,275
$22,750

Answer 1

To calculate the total cash paid by the end of the lease, we need to consider all the components that you mentioned:

1. **Down Payment**: $1,800
2. **Security Deposit**: $375 (this is usually refundable)
3. **Acquisition Fee**: $300
4. **Monthly Payments**: $475 for 36 months

First, we calculate the total of the monthly payments:

\[
\text{Total Monthly Payments} = 36 \text{ months} \times 475 \text{ dollars/month} = 17,100 \text{ dollars}
\]

Now, we add up all these amounts to find the total cash paid by the end of the lease:

\[
\text{Total Cash Paid at Signing} = \text{Down Payment} + \text{Security Deposit} + \text{Acquisition Fee}
\]
\[
\text{Total Cash Paid at Signing} = 1,800 + 375 + 300 = 2,475 \text{ dollars}
\]

Next, add in the total of the monthly payments:

\[
\text{Total Cash Paid by End of Lease} = \text{Total Monthly Payments} + \text{Total Cash Paid at Signing}
\]
\[
\text{Total Cash Paid by End of Lease} = 17,100 + 2,475 = 19,575 \text{ dollars}
\]

Thus, the total cash paid by the end of the lease is **$19,575**.