National Motors Company advertised three alternatives for a 17-month lease on a new Tahoe: (1) zero dollars down and a lease payment of $2,100 per month for 17 months, (2) $6,800 down and $1,850 per month for 17 months, or (3) $42,500 down and no payments for 17 months. (Table B.1, Table B.2, Table B.3, and Table B.4) Note: Use appropriate factor(s) from the tables provided. Calculate the total present value of lease payments under the three alternatives (assume the annual interest rate is 12% compounded monthly). Option 1 Down Payment Monthly Payments Total Present Value Option 2 n = Table Value 1.0000 Table Value Amount Amount Present Value $ Present Value 0 0
National Motors Company advertised three alternatives for a 17-month lease on a new Tahoe: (1) zero dollars down and a lease payment of $2,100 per month for 17 months, (2) $6,800 down and $1,850 per month for 17 months, or (3) $42,500 down and no payments for 17 months. (Table B.1, Table B.2, Table B.3, and Table B.4) Note: Use appropriate factor(s) from the tables provided. Calculate the total present value of lease payments under the three alternatives (assume the annual interest rate is 12% compounded monthly). Option 1 Down Payment Monthly Payments Total Present Value Option 2 n = Table Value 1.0000 Table Value Amount Amount Present Value $ Present Value 0 0
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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![National Motors Company advertised three alternatives for a 17-month lease on a new Tahoe: (1) zero dollars down and
a lease payment of $2,100 per month for 17 months, (2) $6,800 down and $1,850 per month for 17 months, or (3)
$42,500 down and no payments for 17 months. (Table B.1, Table B.2, Table B.3, and Table B.4)
Note: Use appropriate factor(s) from the tables provided.
Calculate the total present value of lease payments under the three alternatives (assume the annual interest rate is 12%
compounded monthly).
Option 1
Down Payment
Monthly Payments
Total Present Value
Option 2
Down Payment
Monthly Payments
Total Present Value
Option 3
Down Payment
Total Present Value
n =
i =
Table Value
1.0000
1.0000
Amount
Present Value
1.0000
$
Table Value Amount Present Value
0
0
Table Value Amount Present Value](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffe226db6-23db-4f12-990f-730630641dda%2F9a0d91c9-79cd-4dce-a916-8939b0830fe7%2Fgdi69l4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:National Motors Company advertised three alternatives for a 17-month lease on a new Tahoe: (1) zero dollars down and
a lease payment of $2,100 per month for 17 months, (2) $6,800 down and $1,850 per month for 17 months, or (3)
$42,500 down and no payments for 17 months. (Table B.1, Table B.2, Table B.3, and Table B.4)
Note: Use appropriate factor(s) from the tables provided.
Calculate the total present value of lease payments under the three alternatives (assume the annual interest rate is 12%
compounded monthly).
Option 1
Down Payment
Monthly Payments
Total Present Value
Option 2
Down Payment
Monthly Payments
Total Present Value
Option 3
Down Payment
Total Present Value
n =
i =
Table Value
1.0000
1.0000
Amount
Present Value
1.0000
$
Table Value Amount Present Value
0
0
Table Value Amount Present Value
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