A construction company agreed to lease payments of $425 76 on construction equipment to be made at the end of every three months for 3 25 years Financing is at 4% compounded quarterly (a) What is the value of the original lease contract? (b) I due to delays, the first 6 payments were deferred, how much money would be needed after 7 payments to bring the lease payments up to date? (c) How much money would be required to pay off the lease after 7 payments? (d) If the lease were paid off after 7 payments, what would the total interest be? (e) How much of the total interest would be due to deferring the first 6 payments?

A construction company agreed to lease payments of $425 76 on construction equipment to be made at the end of every three months for 3 25 years Financing is at 4% compounded quarterly (a) What is the value of the original lease contract? (b) I due to delays, the first 6 payments were deferred, how much money would be needed after 7 payments to bring the lease payments up to date? (c) How much money would be required to pay off the lease after 7 payments? (d) If the lease were paid off after 7 payments, what would the total interest be? (e) How much of the total interest would be due to deferring the first 6 payments?

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter10: Long-term Liabilities

Section: Chapter Questions

Problem 10.8E

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