Claude James, a salesman,

Claude James, a salesman,

Claude James, a salesman, needs anew car for business use. He expects to be promoted to a supervisory job after 3 years, and he will no longer be on the road. The company reimburses salesmen each month at the rate of 55 cents per mile driven. Claude believes he should use a the nominal interest rate of 12% per year but compounding is done monthly. If the car could be sold for $7500 at the end of 3 years, which method should he use?A. Pay cash: the price is $26,000B. Lease the car for a $700 monthly lease for 36 months. The car returns to th company afterwards.C. lease car for $720 a month for 36 months and the car could be bought for $7000 afterwards.

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