Question 1: Ted wants to buy a new Volvo. He plans to put $20,000 down and finance $30,000 for 5 years at 12% interest. Ted estimates that he will be able to sell the car at the end of five years for $7,000. What is Ted's monthly payment?
Question 2: After Ted talked to the salesman, he learned that Volvo would lease him the same car at 12% interest, $899 per month, for 5 years without requiring a down payment. Should Ted lease or buy the Volvo?