Question

For his business, Nicholas leased equipment valued at $25,000. The terms of the lease required payments of $1850 every month. If the first payment is due eighteen months after the lease was signed and interest is 3% compounded semi-annually, what is the term of the lease? State your answer in years and months (from 0 to 11 months). The term of the lease is year(s) and month(s). (Type whole numbers.)

Answer 1

1850/(r/12)*(1-1/(1+r/12)^n)*1/(1+r/12)^17=25000
1850/((1+3%/2)^(2/12)-1)*(1-1/(1+(1+3%/2)^(2/12)-1)^n)*1/(1+(1+3%/2)^(2/12)-1)^17=25000
=>n=14.366328

1 years 3 months