what is the present value of the lease if the car can likely be sold for $3,500
ID: 2401725 • Letter: W
Question
what is the present value of the lease if the car can likely be sold for $3,500 at the end of four years ? Homework: Chapter 8-Hw Score: 0.5 of 1 pt 10 of 10 (10 complete) g S8-21 (similar to) Joslin Leasing leased a car to a customer. Joslin will receive $325 a month for 48 months. (Assume the lease payments occur at the end of each month.) 1. What is the present value of the lease if the annual interest rate in the lease is 6% Use the PV tunction in Excef to compute the present value 2. What is the present value of the lease if the car can likely be sold for $3,500 at the end of four years? 1.what is the prese nt value of the lease it the annual interest rate inteloase is 6%? Use te PtunctioninExcele to compute te present vale(Rord your answer tothe nearest cent) The present value of the lease is $ 13,838 60 2. What is the present value of the lease if the car can likely be sold for $3,500 at the end of four years? (Round your answer to the nearest cent) The present value of the lease is S Enter any number in the edit fields and then click Check Answer Clear AllExplanation / Answer
1. Using the PV function in excel, the inputs will be: rate = 6%/12, Nper = 48 and pmt = -325.
Excel gives an output of $13,838.60
2. Here the cash flow at the end of 4th year = -$3,500
This will be inputted as “FV” in the excel formula. Thus rate = 6%/12, Nper = 48, pmt = -325 and FV = -3500.
This gives a PV of $16,593.45
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