Present Value of $1 Discounted at Number of Periods 10% 12% 16% 0.909 0.893 0.862 1.736 1.690 1.605 2.487 2.402 2.246 3.170 3.037 2.798 3.791 3.605 3.274 The interest rate implicit in this lease is approximately: a. 10% b. 12% c. between 10% and 12% d. 16% 2345
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
An office equipment representative has a machine for sale or lease. If you buy the machine, the cost is $7,590. If you lease the machine, you will have to sign a noncancelable lease and make 5 payments of $2,000 each. The first payment will be paid on the first day of the lease. At the time of the last payment, you will receive title to the machine. The present value of an ordinary annuity of $1 is as follows:
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