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Abigail, an office administrator, is evaluating the following quotation that she received for the purchase of a printer for her office: Lease Option: Make payments
Abigail, an office administrator, is evaluating the following quotation that she received for the purchase of a printer for her office:
Lease Option: Make payments of $90 at the beginning of every month for 3 years. At the end of 3 years, make the final payment of $500.
Purchase Option: Make a payment of $3,250 immediately.
a. What is the present value of the lease option if money is worth 8.1% compounded semi-annually?
c. What is the present value of the lease option if money is worth 9.6% compounded semi-annually?
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