Dell Canada Advertises a Computer Bundle Including Printer, Router and Home

Dell Canada advertises a computer bundle including printer, router and home network attached storage for $2995. The same system bundle may be leased for 24 months at $130 per month, at the beginning of each month. At the end of the lease, the bundle may be purchased for 10% of its retail price. What is the economic cost of the lease or purchase in present value, if a two year loan can be obtained at 12% compounded annually to purchase the computer?

A) Lease is better by $48.64
B) Purchase is better by $48.64
C) Lease is better by $109.38
D) Purchase is better by $109.38
E) Both options are the same.

Correct Answer:

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