What are the disadvantages of Jamir purchasing the car? Check …

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Business Questions

Help Please!!!!Jamir has decided that he needs a new car. He has found the model and color he wants for a purchase price of $25,838. To buy the car, he must put 10 percent down, and his loan is for five years with an interest rate of 4.4 percent. His payments are $432.46. To lease the car, he can sign a three-year contract with payments of $290. He needs to provide $1,500 up front to pay initial fees and his first month’s payment. His annual mileage cannot exceed 15,000 miles. What are the disadvantages if Jamir decides to purchase the car? Check all that apply.√Ǭ†He will not get the model he wants. He will have to come up with a bigger down payment. His monthly payments will be higher.√Ǭ†He will have to return the car when he is done making payments. The purchase price will be higher.

Short Answer

Jamir has to consider the differences between leasing and purchasing a car, focusing on the down payment‚ÄöAi$1500 for leasing versus $2583.80 for purchasing‚ÄöAiand the monthly payments of $290 for leasing compared to $432.46 for purchasing. He should evaluate these factors in relation to his financial situation and long-term investment goals to make an informed decision.

Step-by-Step Solution

Step 1: Determine the Down Payment Options

When considering whether to lease or purchase a car, the size of the down payment is a crucial factor. For leasing, Jamir’s down payment will be a flat fee of $1500. However, if he decides to purchase the car, the down payment will be 10% of the purchase price, which calculates to $2583.80 for a car priced at $25,838. This shows that purchasing the car requires a larger initial investment.

Step 2: Analyze Monthly Payment Differences

Another important aspect to evaluate is the monthly payment amount associated with leasing versus purchasing. If Jamir opts for leasing, his monthly payments are set at $290. In contrast, if he chooses to purchase the car, he will face higher monthly payments totaling $432.46. This significant difference affects overall budgeting and financial planning.

Step 3: Final Decision Considerations

After reviewing the down payments and monthly payments, Jamir needs to consider several factors to make an informed choice. He should weigh the benefits of a lower down payment and monthly cost when leasing against the long-term investment and ownership benefits that come with purchasing. Additionally, he should reflect on his financial situation and how each option affects his budget in the short and long terms.

Related Concepts

Down Payment

The initial amount of money required to be paid upfront when leasing or purchasing a car, often expressed as a flat fee or a percentage of the car’s price

Monthly Payment Amount

The recurring cost paid each month associated with the lease or loan for a car, which reflects the ongoing cost of financing over time

Financial Planning

The process of evaluating and organizing finances to make informed decisions regarding expenditures, investments, and long-term budgeting related to purchasing versus leasing a car.

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  1. Help Please!!!!Jamir has decided that he needs a new car. He has found the model and color he wants for a purchase price of $25,838. To buy the car, he must put 10 percent down, and his loan is for five years with an interest rate of 4.4 percent. His payments are $432.46. To lease the car, he can sign a three-year contract with payments of $290. He needs to provide $1,500 up front to pay initial fees and his first month's payment. His annual mileage cannot exceed 15,000 miles. What are the disadvantages if Jamir decides to purchase the car? Check all that apply. He will not get the model he wants. He will have to come up with a bigger down payment. His monthly payments will be higher. He will have to return the car when he is done making payments. The purchase price will be higher.

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