Jack Sawyer is presently leasing a copier from John OfficeEquipment Company. The lease requires 11 annual payments of $3,500at the end of each year and provides the leaser (John) with an 8%return on its investment. You may use the following 8% interestfactors.
9 Periods
10 Periods
11 Periods
Future Value of 1,
1.99900,
2.15892,
2.33164
Present Value of 1,
.50025,
.46319,
.42888
Future Value of,
12.48756,
14.48656
16.64549
Ordinary Annuity of 1
Present Value of
6.24689
6.71008
7.13896
Ordinary Annuity of 1
Present Value of
6.74664
7.24689
7.71008
Annuity Due of 1
Instructions
(a) Assuming the computer has an 11-year life and will have nosalvage value at the expiration of the lease, what was the originalcost of the copier to John?
(b) What amount would each payment be if the 11 annual payments areto be made at the beginning of each period
Jack Sawyer is presently leasing a copier from John OfficeEquipment Company. The lease requires 11 annual payments of $3,500at the end of each year and provides the leaser (John) with an 8%return on its investment. You may use the following 8% interestfactors.
9 Periods | 10 Periods | 11 Periods | |
Future Value of 1, | 1.99900, | 2.15892, | 2.33164 |
Present Value of 1, | .50025, | .46319, | .42888 |
Future Value of, | 12.48756, | 14.48656 | 16.64549 |
Ordinary Annuity of 1 | |||
Present Value of | 6.24689 | 6.71008 | 7.13896 |
Ordinary Annuity of 1 | |||
Present Value of | 6.74664 | 7.24689 | 7.71008 |
Annuity Due of 1 |
Instructions
(a) Assuming the computer has an 11-year life and will have nosalvage value at the expiration of the lease, what was the originalcost of the copier to John?
(b) What amount would each payment be if the 11 annual payments areto be made at the beginning of each period
