Bhr.6 Mckoy Leasing leased a car to a customer. Mckoy will receive $225 a month, at the end of each month, for 48 months.Use the PV function in Excel to calculate the answers to the following questions1. What is the present value of the lease if the annual interest rate in the lease is 6%?2. What is the present value of the lease if the car can likely be sold for $8,000 at the end of four years?1. What is the present value of the lease if the annual interest rate in the lease is 6% ? (Do not roundintermediary computations, but round your final answer to the nearest cent.)The present value of the lease is

The problem case wants to calculate the present value of the lease payment without and with the car…

Answered: Mckoy Leasing leased a car to a…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Mamadou is leasing a car originally valued at $42,130. The lease is being financed with an interest rate of 7.87% compounded monthly with payments of $466 at the beginning of each month. How many payments will Mamadou have to make to repay the original value of the car? Choose BGNBGN or ENDEND ? BGN END N = (2 decimal places) 1/Y = % PV = $ PMT = $ FV = $ Number of payments = (round to the next higher whole number) Check AnswerQuestion 2 P/Y = C/Y =
You are interested in leasing a new car for 36 months. • The value of the car is $22,555. • You must pay $3025 at signing, which does not include the first month’s lease payment. • The monthly lease cost for the car is $154 for 36 months. • At the end of the lease, you will need to pay a lease termination fee of $2000. • The interest rate for this type of new car is 1.90% APR. Calculate the present worth of leasing the car.
Find the present value of the following annuities. Assume the discounting occurs once a year A. The customer agreed to pay rent at the end of each year and the landlord charges $21,600 per year . The required rate of return of the landlord is 6.85%. The rent contract will last for 7 years Required: Find the present value of this agreement for the landlord B. A customer approached a car sales agent and makes a car lease agreement for 6 years. The cash flow [annual] is $6000. The agent charges 7.2% interest on such contract Required: How much will be the present value of such an agreement ?
Your car dealer is willing to lease you a new car for $190 a month for 36 months. Payments are due on the first day of each month starting with the day you sign the lease contract. If your cost of money is 5.2 percent, what is the current value of the lease? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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
A real estate broker decides to lease a car for 36 months. Suppose the annual interest rate is 7.8%, the negotiated price is $48,000, there is no trade-in, and the down payment is $3,000. Find the monthly lease payment (in dollars). Assume that the residual value is 48% of the MSRP of $51,800.
A real estate broker decides to lease a car for 36 months. Suppose the annual interest rate is 7.8%, the negotiated price is $49,000, there is no trade-in, and the down payment is $4,000. Find the monthly lease payment (in dollars). Assume that the residual value is 49% of the MSRP of $51,5000. Round your answer to the nearest cent.
A car can be purchased by paying $27 000 now or can be leased by paying $725 per month for the next four years, with the first payment due on the day of signing lease. What nominal rate of interest is charged on the lease?
Imagine you leased a piece of equipment for three years. The lease required payments of $10,000 per year, due at the end of each year. Calculate the present value of each payment if the interest rate is 10%. Complete the following table: Present Value of Payment Payment $10,000 $10,000 $10,000 Year Year 1 (end of this year) Year 2 (end of next year) Year 3 (end of the following year) What is the total present value of all three payments?
Shamma approaches Al-Meezan Islamic Bank to lease a car using an Ijara waIqtina contract ending in the ownership transferring to Shamma. The price of thecar is AED100,000. The lease period is 4 years, during which 40% of the value ofthe asset will be used up. The bank wants a profit rate of 7% in the lease contract.Calculate the monthly lease payment for the customer.Multi Line Text.
You are interested in leasing a car for $425 per month, due at the beginning of each month. Using an interest rate of 4% annually, what is the present worth of a one-year lease for this car?
Alternative Calculation of Monthly Lease Payment: FV PV (1+ i)N 1 LP = 1 (1+i)N-A i + A where LP – monthly lease payment; PV – the present value of the future payments on the lease, including the residual value, i.e. it is a lease amount; FV – the future value of leased asset or its residual value; N- the lease term (number of months); A - the number of payments to be paid in advance (0,1,2,...); i- monthly interest rate (i = APR÷12). The formula presented above can be used for any payment frequency. Just be sure that N is the number of periods and į is the interest rate per period.

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