Mary contracts to lease an automobile from Zippo Sales with payments of $300 per month for a year and a final balloon payment of $1,200.This final payment is:

A) lawful,since it satisfies the requirements of the Consumer Leasing Act.
B) unlawful,since it exceeds $1,000.
C) unlawful,as it exceeds three times the average monthly payment.
D) lawful,since both parties have contracted on mutual agreement.

Consumer Leasing Act

is a federal law in the United States that regulates personal property leases that exceed four months and are used primarily for personal, family, or household purposes, to ensure consumers are informed about the terms and costs.

Balloon Payment

A large final payment on a mortgage that has relatively low fixed payments during the life of the mortgage.

Lease Automobile

A contractual agreement where one party (lessee) pays to use a vehicle owned by another party (lessor) for a predetermined time period.