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Payments on a five​-year lease valued at $34,000 are to be made at the beginning of...

Payments on a five​-year lease valued at $34,000 are to be made at the beginning of every three months. If interest is 11.2​% compounded quarterly​, what is the size of the quarterly ​payments?

The size of the quarterly payments is $___.

​(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as​ needed.)

Solutions

Expert Solution

Since payments are quarterly, number of periods = 5*4 =20

Quarterly rate of interest = 11.2%/4 = 2.80%

Present value of the lease = $34000

The quarterly payments is calculated in excel using PMT function

The quarterly payment amount is therefore = $2182.18

jeff jeffy answered 1 year ago
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