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Colt1911 [192]
3 years ago
12

Annuity due.   Reginald is about to lease an apartment for 12 months. The landlord wants him to make the lease payments at the s

tart of the month. The monthly payments are ​$1 comma 300 per month. The landlord says he will allow Reg to prepay the rent for the entire lease with a discount. The​ one-time payment due at the beginning of the lease is ​$14 comma 778 . What is the implied monthly discount rate for the​ rent? If Reg is earning 1.5 ​% on his savings​ monthly, should he pay by month or make the​ one-time payment?
Business
1 answer:
attashe74 [19]3 years ago
8 0

Answer:

a. The implied monthly discount rate for the rent is 0.843% (10.115%/12)

b. He should pay by month because he will earn 1.5% on his savings and pay 0.843% interest monthly.

Explanation:

a) Monthly payments at the start of the month = $1,300

One-time payment at the beginning of the lease = $14,778

Present Value  14778

Residual Value  0

Lease Term  0  years  12  months

Monthly Payment  1300

Result

Interest/Return Rate 10.115%

Total of 12 Monthly Payments $15,600.00

Total Interest $822.00

If Reg is earning 1.5% on his savings monthly, he will earn $21,957:

Annuity factor for 12 months at 1.5% = 16.89

Total of Reg's savings at the end of 12 months = $21,957 ($1,300 * 16.89)

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Answer:

Explanation:

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3 years ago
Consider the production of paper in Strelsau. Suppose that the supply of paper is upward-sloping and the demand for paper is dow
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3 years ago
Of the following mortars, type ____ is the strongest
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3 0
4 years ago
Which of these statements is true?
olasank [31]

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Answer:

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