Question

bob is thinking about leasing a car. the lease comes with an interest rate of 8%. determine the money factor that will be used to calculate bobs payment.
a. 0.00033
b. 0.00192
c. 0.00333
d. 0.01920

please select the best answer from the choices provided

a
b
c
d

Explanation:

Identify the given interest rate

$$ \text{Annual Interest Rate (APR)} = 8\% = 0.08 $$

Apply the money factor formula

$$ \text{Money Factor} = \frac{\text{APR}}{2400} = \frac{8}{2400} $$

Calculate the final value

$$ \text{Money Factor} = \frac{1}{300} \approx 0.00333 $$

Answer:

• a. 0.00033
• b. 0.00192
• c. 0.00333 (Correct answer)
• d. 0.01920