Crystal secured a lease on a machine by paying $1,800 as a down payment and then $275 at the beginning of every month for 4 years. Assume that the cost of financing is 3.30% compounded monthly. a. What was the principal amount of the loan? b. What was the cost of the machine? c. What was the amount of interest paid over the term?

Crystal secured a lease on a machine by paying $1,800 as a down payment and then $275 at the beginning of every month for 4 years. Assume that the cost of financing is 3.30% compounded monthly. a. What was the principal amount of the loan? b. What was the cost of the machine? c. What was the amount of interest paid over the term?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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