1. A contract requires lease payments of $800 at the beginning of every month for 5 years.

a. What is the present value of the contract if the lease rate is 5.50% compounded annually?

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b. What is the present value of the contract if the lease rate is 5.50% compounded monthly

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2. Edward secured a 5-year car lease at 6.20% compounded annually that required him to make payments of $881.77 at the beginning of each month. Calculate the cost of the car if he made a downpayment of $1,000

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