Veronica secured a lease on a machine by paying $1,800 as a down payment and then $750 at the beginning of every month for 6 years. The lease rate was 3.75% compounded monthly. What was the principal amount of the lease? What was the cost of the machine? What was the amount of interest paid over the term of the lease?

Veronica secured a lease on a machine by paying $1,800 as a down payment and then $750 at the beginning of every month for 6 years. The lease rate was 3.75% compounded monthly. What was the principal amount of the lease? What was the cost of the machine? What was the amount of interest paid over the term of the lease?

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 5E

See similar textbooks

Similar questions

Katie secured a lease on a machine by paying $1,550 as a down payment and then $650 at the beginning of every month for 6 years. The lease rate was 4.50% compounded monthly. a. What was the principal amount of the lease? $0.00 Round to the nearest cent b. What was the cost of the machine? $0.00 Round to the nearest cent c. What was the amount of interest paid over the term of the lease? $0.00 Round to the nearest cent
Keith secured a lease on a machine by paying $1,900 as a down payment and then $600 at the beginning of every month for 5 years. The lease rate was 3.75% compounded monthly. a. What was the principal amount of the lease? $0.00 Round to the nearest cent b. What was the cost of the machine? $0.00 Round to the nearest cent c. What was the amount of interest paid over the term of the lease? $0.00 Round to the nearest cent
Kyle secured a lease on a machine by paying $2,000 as a down payment and then $700 at the beginning of every month for 5 years. The lease rate was 5.75% compounded monthly. a. What was the principal amount of the lease? Round to the nearest cent b. What was the cost of the machine? Round to the nearest cent c. What was the amount of interest paid over the term of the lease? Round to the nearest cent
Paul secured a lease on a machine by paying $1,700 as a down payment and then $500 at the beginning of every month for 6 years. The lease rate was 3.50% compounded monthly. a. What was the principal amount of the lease?
Suppose you are a property owner and you are collecting rent for an apartment. The tenant has signed a one-year lease with $600 a month rent, payable in advance. Find the present value of the lease contract if the discount rate is 12% per year.
Crystal secured a lease on a machine by paying $1,800 as a down payment and then $275 at the beginning of every month for 4 years. Assume that the cost of financing is 3.30% compounded monthly. a. What was the principal amount of the loan? b. What was the cost of the machine? c. What was the amount of interest paid over the term?
Nevaeh is leasing a car originally valued at $33,630. The lease is being financed with an interest rate of 6.97% compounded monthly with beginning of month payments of $621. (a) How many payments will Nevaeh have to make to repay the original value? payment(s) (b) How long, in months, will it take Nevaeh to pay off the lease? (Hint: In an annuity due, payments are made at the beginning of each period.) month(s)
a contract requires lease payments of $700 at the beginning of every month for 5 years. a. What is the present value of the contract if the lease rate is 4.77% compounded annually? b. What is the present value of the contract if the lease rate is 4.77% compounded daily? Andrew paid off his student loan in 4 years by making payments of $550 at the beginning of every month. The interest rate on his loan was 6.20% compounded monthly. a. Calculate the size of the original loan. b. Calculate the amount of interest paid on the loan.
a car can be purchased by paying $27000 now or can be leased by paying $725/month for the next four years with the first payment due on the day of signing the lease. What nominal rate of interest is charged on the lease
You are leasing some furniture for your apartment. The monthly lease is for $395/month, payable at the beginning of the month. If your personal cost of capital is a 3% nominal annual rate, what is the present value of a one-year lease?
A vehicle can be purchased by paying $18,000 now, or it can be leased by paying $515 per month for the next three years, with the first payment due on the day of signing the lease. What nominal annual rate of interest compounded monthly is charged on the lease?
McGee Leasing leased a car to a customer. McGee will receive $300 a month,at the end of each month, for 36 months. Use the PV function in Excel® to calculate the asnwers to the following questions1. What is the present value of the lease if the annual interest rate in the lease is 18%?2. What is the present value of the lease if the car can likely be sold for $6,000 at the end ofthree years?