Solution 1:
PV Factor based on | |
Table or Calculator function | PVA of $1 |
Payment: | $5,300 |
n= | 5 |
i= | 12.00% |
PV factor | 3.60478 |
Present value of lease | $19,105 |
Solution 2:
PV Factor based on | |
Table or Calculator function | PVAD of $1 |
Payment: | $5,300 |
n= | 5 |
i= | 12.00% |
PV factor | 4.03735 |
Present value of lease | $21,398 |
Solution 3:
quarterly rate of interest = 3%
Effective annual interest rate = 1*(1+0.03)^4 - 1 = 12.55%
Deposit Date | i= | n= | Deposit | PV Factor | Present Value |
31-Dec-22 | 12.55% | 1 | $5,300.00 | 0.88849 | $4,709 |
31-Dec-23 | 12.55% | 2 | $5,300.00 | 0.78942 | $4,184 |
31-Dec-24 | 12.55% | 3 | $5,300.00 | 0.70140 | $3,717 |
31-Dec-25 | 12.55% | 4 | $5,300.00 | 0.62319 | $3,303 |
31-Dec-26 | 12.55% | 5 | $5,300.00 | 0.55370 | $2,935 |
Total | $18,848 |
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