25. Rita can purchase a new car for $30,000. Alternatively, in addition to a down payment of $1000, Rita can make lease
payments of $500 at the beginning of each month for three years to lease the car. The car has a residual value of $15,000. Assume that the cost of borrowing is 4.25% compounded monthly.
a. Which option is economically better for Rita?
b. In the lease option, what will be the buyback value of the vehicle at the end of two years?