Ralph is leasing a $32,000 car for 36 months. The terms of his lease include an 8.5% interest rate (money factor of 0.00354) and a residual value of 72%. Determine Ralph’s approximate monthly lease payment.

First find the residual value: $32,000 × 0.72 = $23,040. The monthly depreciation charge is ($32,000 − $23,040) ÷ 36 ≈ $248.89. The monthly finance charge is ($32,000 + $23,040) × 0.00354 ≈ $194.84, so the approximate monthly payment is $248.89 + $194.84 = $443.73, choice D.

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